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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4791
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Hi I'll set the scene I have a brother and sister. My mum

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I'll set the scene I have a brother and sister. My mum just died aged 95. Her estate is likely to be £80-90K max so nowhere near the IHT level. 2 years ago mum loaned my brother approx 50K to seal the purchase a property before he'd sold his own. Mums health deteriorated and she decided when my brother repaid teh loan to simply share it equally with me and my brother and sister as gifts.
My question - do I and my siblings have any tax liability on these gifts?
Appreciate your help/

Hello Dick, I'm Keith and happy to help you with your question. In a word, not a penny!

Loans, apart from interest if any in the hands of the recipient thereof, are outside the scope of UK taxation. Gifts are also so treated save the creation of Potentially Exempt Transfers (PETs) in the estate of the donor. PETs are added back to the donor's estate at a taper in the event of a demise up to seven years from the date of gift and are the first to suffer IHT. If the donor's estate is insufficient to meet the IHT on the PET it cascades down to the beneficiary for immediate payment.

However, that quick canter through the problem of gifts viz a viz IHT is just froth as we know from the tenor of your question that your Mother's estate is so far below the 325K at which IHT kicks in as to be irrelevant.

I do hope I have set your mind at rest on this matter. Just thank your lucky stars that you don't live in France where gift tax kicks in on the recipient at about the 5K euro level and escalates!

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Customer: replied 3 years ago.
Many thanks Big Duck. Big weight off. £40 very well spent. D
Delighted to be of assistance.
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