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Father (88) gifts/loans son money - IHT question

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Cunco Sat 25-Feb-17 15:28:36

I am not clear that you would have to pay the IHT on the gift.

If there are sufficient funds to pay all IHT liabilities in the estate of the person who dies, does a person who receives a gift have to pay IHT tax? I have googled this question and I am still unclear.

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howardfh Sat 25-Feb-17 15:03:08

In the long run, if the money's given back to his account and isn't spent, tax will still have to be paid if it's passed on to me. But I agree, get it typed up and signed, and kept up to date is the best method.
No point in keeping quiet...I want to keep everything up front and unquestionable, won't want any hassle at an upsetting time.
Think I'll accept it as a gift and simply add it on to the form when the time comes, if he lives a while then IHT will be reduced on it anyway.
Will keep all the paperwork r/e the two cars receipts of course. Thanks!!

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Rigby46 Sat 25-Feb-17 14:28:22

A gift is not a loan. If it's a loan, type up a written agreement that you both sign with a repayment schedule, keep a record ( and proof) of repayments made and then if he dies before the total is repaid, you will owe the balance to the estate. or just keep quiet about it - will anyone ever know

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howardfh Sat 25-Feb-17 14:15:02

**Note, he's 88 shortly - in the new tax year!!

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howardfh Sat 25-Feb-17 14:13:41

Hi!
Simply this, my father 87 can't drive any more, so he gifted me his car, which I part-exchanged for a new one and he gifted me the balance to pay for the new one. In all, £8500. This is on top of his annual £3000 IHT-free gift.

So, at present, should he die I will have to pay 40% tax on that as house+savings are well above the threshold. No problem with that.

BUT, over the next 12 months I intend to pay him back, hopefully in full.

How will this stand with IHT, can I put on the form that this "gift" was a "loan" and some, if not all, has been paid back, so not due for tax? If not, what can I do??

Has anyone come across this before? I'm sure some of you have made substantial gifts/loans to children, great/grandchildren etc and know exactly what the situation is?
Thanks!!

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