Hello Shaun, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
Inter spousal bequests are outside the scope of UK Inheritance Tax (IHT). They increase the 325K limit. Your mother, can inherit any of her deceased spouse's unused 325K exemption making a total of 650K tax free on her decease a possibility. Remember also that where a family home is left to children then the 325K limit is being progressively increased to 1 million, 2017 to 2020.
If your mother give you a gift a you suggest that creates a Potentially Exempt Transfer (PET) in her IHT affairs. PETs run off at a taper over seven years and in the event of a decease within that period are added back to the donor's estate for IHT purposes. PETs are the first to suffer IHT and if the estate is insufficient to pay the tax then the liability cascades down to the beneficiaries for immediate payment.
I do hope that you have found my reply of assistance.
Yes, your mother now has a 650K tax free limit.
Providing that on decease, after PETs are added back, your mother's estate does not exceed 650K then there will be no tax to pay. The potential liability remains in place for the seven years however. There is always the albeit unlikely scenario of your mother coming into substantial sums, eg the jackpot Premium Bond win, before she passes on.
Thank you for your support.