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Inheritance tax - confirmation on gifts needed

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Hi All

Im ACCA qualified but asking this in my capacity as daughter in law helping my mother in law who is executor to her recently deceased husbands estate. I work as a management accountant and it’s been over 20 years since I qualified so I’m in need of some assistance.

My MIL is the only beneficiary of an estate est £600k but there were a number of gifts in the previous seven years totalling around £106,500. I have a couple of questions

1) my MILs own mother died around five years ago and she specifically inherited a sum of money which was received into my MILs and FILs joint account. Some of this was then gifted to the next generation -  can we ignore this and not include it as a gift from my FIL as it effectively was my MILs to give even though it came from a joint account?

2) As total gifts are only £106,500 (less if 1) is correct, plus we have the £6000 to deduct for the two years annual exemption) am I correct in thinking the estate is then still an excepted estate? 

Many thanks for any assistance



Replies (6)

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By maxaca
10th May 2019 14:23

Yes, I would argue that the inheritance was your MIL's.
Yes, the Estate is an excepted Estate on the circumstances you have described - also, if any of the gifts could fall under normal expenditure out of income exemption this would reduce still further the NRB used against the pre-death gifts and increase the TNRB available to your MIL's Estate in due course.

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Replying to maxaca:
By lionofludesch
10th May 2019 15:28

I agree that normal expenditure out of income is an exemption which is often overlooked.

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Replying to lionofludesch:
By Tax Dragon
10th May 2019 16:06

I agree the bounds of your agreement.

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Replying to Tax Dragon:
Hallerud at Easter
14th May 2019 11:24

Are you both expecting judicial appointments when you will be able to spend all your time stating ," I concur with my learned colleague"

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Replying to DJKL:
By Tax Dragon
14th May 2019 11:53

I'll be joining the sub judiciary (never have to have my own opinion; only ever have to concur with learned colleagues; not allowed to say why, due to sub judicial status).

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