Giving money to adult children

evenasus

RayWolfe wrote: »

When you're both dead, the worrying will stop, I promise.

That made me smile.

EdGasket wrote: »

That may depend on where you go next, heavan, hell, or reincarnated as who knows what !

Decisions, decisions - then again, I doubt I'll get to choose.

I have been good though.

JamesU

EdGasket wrote: »

Lets just hope I live another seven years; makes things a lot simpler all round

From EdGasket there came a taxing question
Some thoughts, with perhaps a little suggestion?

Cash to children, no taxes for anybody to pay
But a potential IHT on the estate, if too much cash given away
A good link from G_M on what IHT liabilities might be
There is an annual allowance of £3K per person without IHT

This £3K allowance is an annual exemption
And the implication of this deserves particular attention
If parents use joint £6K allowances across financial years with care
£6K or £12K or even £18K for the children to share

And this annual exemption it should be known
For the present at least is written in stone
And should the children on this for financial help rely
IHT liabilities on the estate are not created should one die

There is also an allowance of £5K per person for a child's wedding
And if Mum and Dad contribute this, £10K in total to be dreading
After so much gifting if the parents are still not feeling poor
Consider an annual small gift 2 x £250 = £500 to the son-in-law

And if the parents want more going into the children’s net
Perhaps a potentially exempt transfer, known as a PET
Taxwise more complicated, tapered over 7 years to comply
And there may be IHT implications if one were earlier to die


JamesU:A

mary

I'm impressed. Not only being sufficiently familiar with the subject matter but managing to put it into verse as well. That deserves an A*

JamesU

evenasus wrote: »

Unfortunately - Yes.

House value £400K plus similar savings.

The big IHT will be when the second of us dies.

A different set of circumstances with different solutions required... I guess as a broad generalisation on the figures (more than enough on an open forum), question is how to prevent £60K IHT chargeable to the estate on second death (assume a current £650K allowance to keep it simple)? Will depend on precise details on assets and ownership etc. Obvious general rule of thumb is "Equalisation of joint assets" to maximise transferrable nil rate band, but there are lots of other tricks including the annual allowances, gifting out of regular income, gifting in 7 year cycles from joint and/or sole assets etc. Too many options to consider depending on exact circumstances and any choices you would like to make.

If you want to look into this further, starting point is to understand as much as possible about the options if you are not already familiar them. I have included a link to an excellent book on the subject that describes them extremely well. I think this latest edition also has an update on the merits of various trusts. Then see a specialist tax advisor for an hour or two……..

Alternatively, depending on your political views and feelings, how about voting conservative and seeing if they are capable of delivering on any of their IHT witterings? Regards.

http://www.taxcafe.co.uk/inheritance-tax.html

JamesU


I am not a financial advisor

evenasus

JamesU wrote: »

If you want to look into this further, starting point is to understand as much as possible about the options if you are not already familiar them. I have included a link to an excellent book on the subject that describes them extremely well. I think this latest edition also has an update on the merits of various trusts. Then see a specialist tax advisor for an hour or two……..


JamesU


I am not a financial advisor

Thank you for that information. I will definitely check the book out.
I/we really ought to actually do something, instead of just keep talking about it.

JamesU wrote: »

Alternatively, depending on your political views and feelings, how about voting conservative and seeing if they are capable of delivering on any of their IHT witterings? Regards.

Vote? I will (always have) and I hope they do deliver on their witterings.

RayWolfe

evenasus wrote: »

Vote? I will (always have) and I hope they do deliver on their witterings.

Oh dear! I hope I haven't been helping a conservative ....

JamesU

RayWolfe wrote: »

Oh dear! I hope I haven't been helping a conservative ....

But for how long has Evanusus actually been inclined in that political direction? Since the DC IHT witterings maybe?

JamesU

RayWolfe

Possibly ....

evenasus

JamesU wrote: »

But for how long has Evanusus actually been inclined in that political direction? Since the DC IHT witterings maybe?

JamesU

Sorry to disappoint you both.
I've been a Tory all my life. Much to the chagrin of my parents.
My father was a staunch Labour voter.

RayWolfe

That's fine ... but beware any future advice that I may give to you; it could be deliberately wrong ... instead of accidentally wrong as it normally is!