If you give assets away while you are alive, and don't survive 7 years, the gifts are still in your estate. But what if the administrator of your estate doesn't know about the gifts? HMRC's guidance is clear: the recipient is responsible for making sure the administrator knows about the gifts, and the recipient can be fined if he doesn't tell the administrator.
Inheritance Tax: error, penalties and the Hutchings case When someone dies, one of the important jobs of the personal representative is to ensure that the right amount of Inheritance Tax is paid. As part of this, they need to report to HMRC any relevant gifts that the deceased may have made in the seven years before they died. Normally, we would expect the personal representative to ask family members, friends, associates, those named in any will and the deceased’s solicitors, accountants or financial advisors whether they have received or whether they have any knowledge of any such gifts in this period.