Inheritance taxes and Wills

Having moved back to the UK last year and bought a house recently we have now drawn up wills here in the UK. Pretty simple, sell everything and split it all evenly between the 2 children.

Our previous wills were in Texas which are now invalid since we have revoked all previous wills and testamentary dispositions.

We are both dual UK/US citizens and most of our assets are still in the USA in the form of IRAs and an after-tax brokerage account.  The beneficiaries named on those accounts are first to each other and then 50/50 to the children.

To avoid some UK inheritance taxes we plan on passing money to the children, beginning with the purchase of a house for our son who is planning on moving over in October this year.

Gifting money to our children will be reported to HMRC as they have a 7 year look-back period, but do we need to also report the gifts to the IRS?  (We are, or will be, well short of the ~$5m estate tax exemption in the USA). I know that we can gift up to ~$30k/year between us to each child per year with no IRS reporting requirements but the money to buy this house will far exceed that.

Yes; you'd file US gift tax returns for the gifts to the children. I assume you have also drafted LPAs at the same time as the Wills? You may have also drafted US Durable Power of attorney forms; although these are less widely used/accepted than LPAs within the UK.

Yes; you'd file US gift tax returns for the gifts to the children. I assume you have also drafted LPAs at the same time as the Wills? You may have also drafted US Durable Power of attorney forms; although these are less widely used/accepted than LPAs within the UK.

Thanks for the quick response, it is what I thought, and yes we did have LPAs drafted at the same time.