Product category:
Protection
News Release from: Standard Life Bank | Subject: Protection
Edited by the Insidemoneytalk Editorial
Team on 03 September 2007
Standard Life advises that Gift Records
have never been more important
HM Revenue and Customs (HMRC) will be watching more carefully for lifetime gifts, according to their latest IHT and Trusts Newsletter.
The newsletter, which came out on 20 August 2007, contains an item about investigations arising on death which will look at lifetime gifts From now until 31 March 2008, there will be more scrutiny of lifetime gifts as reported at death
This article was originally published on Insidemoneytalk on 23 Feb 2007 at 8.00am (UK)
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The form used to report lifetime gifts is called the D3 form and this is completed and submitted by executors of the deceased along with the main paperwork, normally within 6 months of death (the IHT200 form).
The main types of lifetime gifts, made within 7 years of death, which require to be reported are : Potentially Exempt Transfers (PETs) for example an outright gift of cash Chargeable Transfers (CTs) for example a gift to certain types of trust Commenting on the announcement by HMRC, Julie Hutchison, Estate Planning Specialist at Standard Life Assurance Limited, said "Executors will have to pay particular attention to the checks made about lifetime gifts.The ideal situation is for a person to have kept a note of any gifts made and stored this information with their will.To help with this increasingly important area of record-keeping, Standard Life recently launched a Gift Record as part of its Estate Planning Solutions Pack".
"This can be used by individuals and their advisers to record lifetime gifts and can be stored safely for future reference." The HMRC newsletter gives some examples of the types of gifts which they are looking out for in particular.
One example given is of a loan which is forgiven.
In theory, a loan is an asset of the estate at date of death.
If a loan is cancelled, or "forgiven" , that is normally a lifetime gift for Inheritance Tax (IHT) and the 7 year clock starts before it falls out of account.
In research from Standard Life Bank, 57% of parents had helped their children onto the property ladder as first time buyers with either a gift or a loan.
If the person submitting the forms has been negligent in their completion of forms, HMRC will consider whether a penalty is appropriate.
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