Gifting money to family

Altsel

My mother recently passed away leaving my father. He now wishes to gift around £5000 to each of his 2 children & spouses and 6 grandchildren by individual cheques from building society accounts etc - in all around £55,000

Are there any pitfalls or restrictions that may effect this project???

What ways are avaiable to avoid taxation liabilitys now or later??

had she written this gesture into her will it would have been straight forward!

foxxymynx

I don't know about tax, but if any of the people recieving money are on benefits, so long as the total they recieve and have in their bank account at any one time is less than £6000 it won't affect their benefits.

Maybe useless info but I thought it may be worth mentioning.

RayWolfe

Your father can do a Deed of Variation to the will, provided that it is within 2 years of your mother's death. That is just one way of avoiding Inheritance Tax problems when your father dies.

Altsel

Roy thanks for the reply. Inheritance tax is not really the issue as the estate is around £300,000 including money assets.

The issue is the individual gifts made by him now from HIS money currently in building soc etc

Would the individual family recipients be liable for Tax on the sums recieved?

RayWolfe

No. There is no gift tax in the UK.
People can give and receive with no tax implications except IHT and deprivation of assets if in receipt of benefits now and in the future.
So in your case, no tax for the recipients, no tax for your father. However if your father were to claim benefits in the future the Local Authority would investigate any money given away by him.

Altsel

Ray thank you for that, sorry i mis spelt your name earlier

RayWolfe

I was mortified but life is returning to my extremities. :-)

deeor

Ray Wolfe wrote "However if your father were to claim benefits in the future the Local Authority would investigate any money given away by him."
Is there any time limit on this? Seems unreasonable if they try to recover money that someone gifted years ago.