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Sam
Sam, Accountant
Category: Tax
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I have checked the value of my assets. The total is under

Resolved Question:

I have checked the value of my assets. The total is under £284k so Inheritance Tax should be no concern (DOB 09/04/1926). However, if I give cash to my 2 daughters (they could do with it now rather than later!) should those gifts be declared and, if so, where and to whom?
Should I, or my daughters, be aware of any complications/penalties that might arise if I had to go into a care home and applied to the local authority for financial assistance?
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
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Expert:  Sam replied 1 year ago.

Hi

Thanks for your question

You just need to make a written note of what gift you made, to whom with the date and keep this with your will so that should your estate exceed the IHT threshold, and less than 7 years lapse between the date of the gift and your passing then these can be considered.

If you make these gifts now and at a later date do need to apply to the local authority for financial assistance, then this could be treated as a depravation of capital and financial help refused. Much is dependent on how much the gifts are , and what time has lapsed between the gift and the date of any financial assisted application, so please advsie furtehr.

How much would you think of gifting and what is the state of your health now and you age.

Thanks

Sam

Sam and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
I am very grateful for your answer. In the second part you ask for more information, which I will give now:-
1) I would like to give each of my 2 daughters £5,000 (please say if you think this too much;
2) I was born on 9th April, 1926;
3) I am in good health, looking after myself, fully mobile if rather slow, driving a Honda Jazz, managing my wife's affairs with a POA, last went to my doctor's surgery about 3 months ago.
Thank you Sam in anticipation,
Peter.
Expert:  Sam replied 1 year ago.

Hi Peter

Thanks for your response

Based on the additional information you advise

1) If you give each of your daughters £500 then this will not be treated as a deprivation of capital for IHT purposes as it a not a large amount and

2) based on the fact you are in good health at this time, then you also are not putting yourself in a lesser position with knowledge of bad health creating the need of nursing home costs met for the immediate future

For IHT purposes if your estate stays below £365,000 then these gifts will remain exempt with no Inheritance tax attracted - so all good there too

So based on the amounts you advsie this will not be an issue

Thanks

Sam