ashasiva
Blogger
Share this content
0
2
515

Inheritance Tax

Inheritance Tax

Hi

My friend is to receive £10,000 from his uncle as a gift.

could you please advise if he is subject to Inheritance Tax.

Thanks for your time.

SG

Replies

Please login or register to join the discussion.

avatar
By Old Greying Accountant
22nd Jan 2013 12:10

Depends

this is a potentially exempt transfer (PET) and if the uncle dies with 7 years there could be IHT on the gift.

However, if no other gifts have been made then £3000 for 2012/13 and £3000 b/f one year from 2011/12 will reduce the taxable amount to £4000. If he gave £7000 now and £3000 after 5th April 2013 then only £1000 is potentially taxable.

However, if it can be demonstrated the £10000 come out of disposable income of the year, and not from capital, it may be exempted.

Generally a PET wil be taxed in the estate as it uses up the first tranche of the nil rate band (NRB) and increases the amount of the estate chargeable to IHT, but where the value of PETs exceed the NRB the recipient will be taxed.

 

Thanks (0)
avatar
22nd Jan 2013 12:27

Thank you for your comment.

 

SG

 

Thanks (0)