Father’s cash gifts now classed as recompense


In a recent High court case a father’s monetary cash gifts to his two daughters were deemed to be necessary and were not to be classed as part of the deceased’s estate. Normally, such cash gifts given to adult children would form part of the overall estate for valuation and inheritance tax purposes. However, in this case, the deceased chose to move in with one of his daughters, following a cancer diagnosis in 2007. Until that time, his other daughter had been his main carer.

These new living arrangements meant that the daughter’s home needed to renovated and that she needed to give up work to look after her father full-time.

In response, the gentleman sold his home and used the proceeds from the sale to gift both daughters £100,000 each by way of recompense and to fund his care needs.

In cases such as these, the gifts are described as “inter vivos gifts” and do not have “the character of portions”. They are therefore usually omitted from the deceased’s final estate.

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