Cash gift from parent

My mother-in-law is soon to sell her home and move into rented sheltered accomodation. She has suggested gifting her two daughters a lump sum in the region of £50k each which they will use to pay-off their respective mortgages (in part or full). What are the tax implications for parent or children?

Many thanks, Ian Scotland

Reply to
ianw
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There are no immediate direct implications for either parent or children. In particular, gifts do not get taxed as income. The only implications are those which relate to inheritance tax.

When the donor (parent) dies, then any major gifts she made within the 7 years prior to death will be treated for IHT purposes as part of her estate. If that total, including those gifts, is above the exempt amount (currently £300k) the gifts will contribute to the size of the IHT bill. If the children are the beneficiaries of the estate, this will therefore indirectly affect how much they will get.

Reply to
Ronald Raygun

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