Gifting money!

margaret_miller

Im not sure of my current situation about gifting money to my children and grandchildren.

I was informed that you could gift your children £1k per tax year and grand children £500. This I have done for this tax year.

However, I was also told that this was for inheritance tax only? I'm below the threshold for this as I have a property worth £140k and savings of £80k.

I would like to pass on as much money to my children as possible as i'm too old to enjoy it now (although I hope a good few years away from being packed away to a care home!!). I also don't want to be in the same position as my late husband who scrimped and saved all his life then found out that he had to pay £600 pw on care home fees.

Not sure on the rules about the care home selling you house for funding and also the limits I can give to the kids legally?

Any response would be a great help!

Money_Grabber13579

The way I understand it is that you can give £3000 per year away without any consequences as well as small gifts of up to £100 per person per year. Gifts are also allowed for close family members weddings.

With regards the house, if you sell it and give your money away, it will fall under the 7 year rule, so if you go into a care home in the next 7 years, the house will be treated as part of your wealth. I think you are allowed up to c£8000-9000 wealth before you have to pay your own fees. (Problem is, you wouldn't have much of a house for £8k!)

It's also not very fair, as the benefit scroungers get away with free care, while those who have slaved all their lives have to pay their own way.

I can't guarantee that these rules are fully correct, but perhaps someone will come along and correct them if they aren't!

Mojisola

Money_Grabber13579 wrote: »

With regards the house, if you sell it and give your money away, it will fall under the 7 year rule, so if you go into a care home in the next 7 years, the house will be treated as part of your wealth. I think you are allowed up to c£8000-9000 wealth before you have to pay your own fees. (Problem is, you wouldn't have much of a house for £8k!)

There is no 7 year rule regarding funding for care needs.

CLAPTON

1. you can give any amount of money away to who ever you like.,, there are no legal restrictions.

2. But for IHT purposes, if you die within 7 years the gifts (with some exceptions) are added back to your estate for IHT.
However if your estate (including the 7 years gifts) is less than 320k then there is no IHT to pay anyway.
The exceptions for IHT are any number of gifts of £250 to different individuals (so you can give 250 to each of your children and granchildren once per year) and also you can give gifts up to £3,000 in total to other people (you can't give 3000 to a child and also 250 to the same child).
However as your estate is less than the IHT limit then you can give way anything you like without your estate being affect by IHT.

3. Care fee: this is a difficult area: however if you need care in the future and you have given a lot of money away (especially if you give the house away) then the council may consider you have deliberately deprived yourself of the assets and make a charge on the house).
There is no particular timescale for this.
I would suggest you try contacting age concern who may be able to give some advice about this.

4. and do remember that once you have given the money away it's gone. If you need care and you have no money then you will need to rely on whatever the council decide and not make your own choices.
King Lear was not pleased with his gifts.

John_Pierpoint

I don't think the resulting family feud will get this bad:
http://en.wikipedia.org/wiki/King_Lear
:eek::eek::eek::eek::eek::eek::eek::eek::eek::eek::eek::eek::eek:

margaret_miller

Thanking for all the information, it's a lot clearer now!