Accepting Cash v. CGT

In message , pistonbroke writes

Not if it was his main residence and has been during his ownership of it and so long as he doesnt die for 7 years, and even then only if he has already given £125000 away. If he is going into a home then the local authority may regard this gift as a tactic to remove capital and may behave as though he still has the dosh.

n/a

Surely it's not a matter of 'even if he has already given £125,000 away'. There is also what other assets he has. It would depend on total assets. The threshold for inheritance tax is £285,000 (£300,000 from April). So, in general terms it would a question of the tax threshold at time of death, his total assets at death, and the value of anything give away in the 7 years preceding death. Any tax liabilty on such gifts would be adjusted by taper relief, so would depend on how long he survived after giving the money away

If his remaining assets plus other recent gifts are under £125,000 and he gives away £160,000 now, then there should be no liability even if he dies soon. If he has more than £125,000 left and/or has given away other assets, then there might be some liability.

Toom

Capital gains tax wouldn't apply to his main residence.

Any inheritance tax liability, and the amount, would depend on what other assets he has at death, what other assets he might have recently disposed of, and how long he survives after making the gifts. The current inheritance tax threshold is £285,000 (£300,000 from April). You need specialised advice if you don't know how to work out liability, or want ways of reducing any such liability.

Toom

Not for the purpose of the OPs question, which related only to the sale and gift.

Yes, but that is outside the scope of the question.

Yes, but I was merely describing the lowest end for which he could be sure the taxman wouldnt come back to the beneficiary sometime in the next 7 years.

agreed.

Wrong order. The PETs are counted first and then the assets at death, so for the OP to be clear of any tax on the gifts then only the previous gifts re relevant and the threshold at death. Any other assets at death are irrelevant to the OP.

Yes, but the PETs would need to have exceeded the threshold for any taper to apply so the total gifts would need to exceed the then threshold to benefit from taper.

Agreed

If he has £125k left after wards it wont effect the OP but the beneficiaries of the estate may have some IHT to pay, but not the recipients of the PETs..

No, that isnt relevant.

That is relevant.

as is that.

But this isnt. All that is relevant is the previous gifts.