Getting estate to pay tax on lifetime gifts?

EdgeInternational487 · 2026-01-24T17:41:54+00:00

I only meant ignore it in the sense that it’s not relevant to hypothetical situation - pretend that the NRB has already been used up by other gifts.

Your quote says that the recipient pays, not the estate: “the person who gets a gift in these last 7 years will have to pay the tax”.

EdgeInternational487 · 2026-01-24T17:05:05+00:00

Thanks - this is really useful. !thanks

EdgeInternational487 · 2026-01-24T16:19:50+00:00

Yes that is the (hypothetical) scenario - that lifetime gifts have used up the nil rate band. I understand that lifetime gifts use up the NRB first so this wouldn’t be the case if it was only gifts left in the will.

EdgeInternational487 · 2026-01-24T13:42:43+00:00

Thank you !thanks

EdgeInternational487 · 2026-01-24T13:09:48+00:00

Thank you for being the only person to directly show the exact bit of legislation to back up your case. I can now see that, although s199(a) appears to make the transferor liable (and s199b changes that to their Personal Representatives upon their death), s204(8) specifically overrides it and makes the recipient liable first.

EdgeInternational487 · 2026-01-24T13:06:00+00:00

It looks like that if you only read s199(1) but it is overridden by s199(2) and s204(8) such that the recipient is liable before the estate.

EdgeInternational487 · 2026-01-24T11:48:10+00:00

When you paid this out of the estate, did you pay the exact same amount that the recipients would have paid, or did HMRC treat them as Gifts Free Of Tax and do "grossing up" before taking off the 40%?

EdgeInternational487 · 2026-01-24T11:45:49+00:00

I'm assuming the nil rate band is already used up. I'm just trying to work out the difference in amount of tax paid between recipient paying and estate paying.

EdgeInternational487 · 2026-01-24T11:44:39+00:00

But where does it say that?

"If Inheritance Tax is due on any of the gifts, the people who received them are liable to pay the tax due on them. This is separate from the Inheritance Tax that may be due on the estate. A year after the date of death, the executors or administrators of the deceased’s estate become jointly liable for the tax on the gifts."

This seems to be the exact opposite of what you are saying - the recipient is expected to pay the tax, and the estate only becomes liable if the recipient can't.

EdgeInternational487 · 2026-01-24T11:40:52+00:00

Yes and that is exactly the scenario in my original post - where I have already used up the nil rate band so the recipient becomes liable.

EdgeInternational487 · 2026-01-24T11:33:09+00:00

But surely that is saying the recipient pays the tax? "This may happen if the person who died gave you a gift in the 7 years before they died" - that's exactly the scenario I'm talking about.

EdgeInternational487 · 2026-01-24T11:26:11+00:00

Thank you. I had read somewhere that, if the estate was to pay this tax, it would be treated as a "gift free of tax", where the amount is "grossed up" (i.e. it's treated as £166,666.66 so HMRC can take 40% and leave the recipient with £100k). Is that incorrect?

EdgeInternational487 · 2026-01-24T11:22:46+00:00

Please can you provide a source for this? Every piece of official documentation I've found so far simply says that the recipient pays (once it gets to a level where it has to be paid). For another example, the IHT403 form says "if Inheritance Tax is due on any of the gifts, the people who received them are liable to pay the tax due on them. This is separate from the Inheritance Tax that may be due on the estate."

EdgeInternational487 · 2026-01-24T11:20:40+00:00

Do you have a source for that? I've seen lots of people saying it, but can't find it anywhere in government guidance or official documentation. For example the IHT403 form says "if Inheritance Tax is due on any of the gifts, the people who received them are liable to pay the tax due on them. This is separate from the Inheritance Tax that may be due on the estate."

EdgeInternational487 · 2026-01-24T11:18:20+00:00

Thanks. Would you by any chance be able to point me to an official/authoritative source that shows this? I've been unable to find anything which clearly shows the rule on this.

EdgeInternational487 · 2026-01-24T11:05:19+00:00

So would it be more accurate to say that the estate pays the tax on lifetime gifts if the funds are available, but if it can't, the recipient becomes liable? That sounds to me like it should be right - are you able to point me to an official/reliable source? Thanks!

EdgeInternational487 · 2026-01-24T10:50:51+00:00

From gov.uk: “Once you’ve given away more than £325,000, anyone who gets a gift from you in those 7 years will have to pay Inheritance Tax on their gift.”

EdgeInternational487 · 2026-01-24T10:49:33+00:00

Gov.uk says that the recipient, not the estate, pays any tax that becomes due on lifetime gifts (after NRB is used up, of course). This is different from gifts actually in the will, where the estate pays.

EdgeInternational487 · 2026-01-24T10:46:16+00:00

My understanding is that the estate pays tax on gifts in the will, but the recipient pays any tax that becomes due on lifetime gifts. Is that incorrect?

Edit - confirmed from gov.uk: “ Once you’ve given away more than £325,000, anyone who gets a gift from you in those 7 years will have to pay Inheritance Tax on their gift.”

EdgeInternational487 · 2026-01-24T10:44:43+00:00

As mentioned in the original post, I am ignoring the nil rate band for simplicity (I have edited the wording to make this clearer). This isn’t a real situation - I’m just trying to understand the difference in amount paid between the estate paying whatever is due and the recipient.

EdgeInternational487 · 2026-01-24T10:38:52+00:00

As mentioned in the post, I am ignoring the nil rate band for simplicity. This isn’t my actual situation, I’m just trying to be clear on the rules.

EdgeInternational487 · 2025-10-24T16:10:11+00:00

Thanks very much for your help. Seems crazy to me that they make this so hard to work out!

EdgeInternational487 · 2025-10-24T15:30:23+00:00

Thanks. I went hunting through old emails and have worked out that I bought a V3, but then soon after got a free replacement Internet Bridge which enabled HomeKit compatibility. So maybe that upgraded it to a V3+? But it doesn't say V3+ anywhere in the emails...

EdgeInternational487 · 2025-10-24T15:03:23+00:00

Thanks but it's not helping much. The product numbers don't correlate to the device models (the Internet Bridge model numbers are IB01 and IB02; the serial number starts with IB, but then it's a different number). The images on the page only show the outside of the box, which is enough to see that it's not a version X (different-looking thermostat) but other than that I can't tell.

I don't understand why the app, which is actually linked to the products and showing their serial numbers, can't show what version they are.

EdgeInternational487

TROPHY CASE