Gift to Children (tax and other limits).

Si_N_Tist.

Hi there, I don't know whether this is the best place to ask, so if a mod feels it'd be better elsewhere, please point me in the right direction... Ta!

Anyway, my sister-in law is about to buy her first house, and her parents want to give her about £10k to help her out... thing is, we're not sure whether there are any limits as to how much her parents can give her in any financial year, or what the immediate tax liabilities are, either for my sister-in law, or for her parents. I've had a look on direct.gov.uk, but can't find anything that seems relevant. I'm aware of the 7 year limit as regards inheritance tax, and the IHT taper relief for gifts after 3 years, but is there anything else that should be considered?

Advice (or where to find it!) greatfully recieved,
Thanks,:beer:
Si.

robpitt

Si_N_Tist. wrote: »

I'm aware of the 7 year limit as regards inheritance tax, and the IHT taper relief for gifts after 3 years, but is there anything else that should be considered?

Nope
: - )

bobby-boy_2

Hi Rob
there is a better forum try the tax one on here;
but from memory a EACH parent can gift a child 3k per tax year so your sister can get 6k with no tax liability and it is not back calculated into the estate for 7 years re IHT.
Cant remember if it can be topped up from previous years

00ec25

THERE IS NO TAX ON GIFTS
the only implication is the IHT one you have already noted. The £3k per year figure is ONLY relevant if the parents die within the 7 year period as it is an exemption from IHT and thus only applies if the entire parental estate is above the IHT threshold

CLAPTON

just to add to OOec25 comments.

gifts are tax free although IHT may be relevant; however each parent can anyway give 3k per annum each and if they didn't give last year they can carry that forward one year so they can each give 6k this year and it will not be included in IHT should they die within 7 years

also the taper relief only applies to gifts OVER 325,000 (i.e. the OHT limit) so isn't relevant for modest sum like 10k anyway.