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Iheritance Tax. on Gift Premium Bond winnings

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sallybb | 10:03 Wed 09th May 2007 | Business & Finance
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My husbands mother has gifted both him and his brother large value Premium Bonds above the �3,000. yearly limit of permitted inheritance tax exemption. Obviously , should she pass away within 7 years than these bonds will become part of the her estate and be liable to tax. Should these bonds be fortunate enough to produce winnings, are the winnings liable to inheritance taxation?

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Firstly, if the �3000 limit is not used in any one tax year, it may be carried forward to the next tax year, giving a maximum potential examption of �6000 - this may or may not apply in your case.

As you rightly say, they gifts would be part of your mother-in-laws estate if she were to die within 7 years, but any winnings produced in that period would fall within the estate of your husband or his brother.
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thanks kags, very helpful, well if he should win the odd �50, I will have to persuade him to spend it immediately, preferably on me, I'm more deserving , than the greedy Tax man. Laugh!!!
Remember that inflation can reduce the true value of your money over time.

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Iheritance Tax. on Gift Premium Bond winnings

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