cash gift to my children

interest_Ted

I am about to receive my retirement cash lump sum. I would like my four children to share my 'good fortune' in a small way by giving them £3,000 each.

I understand that I can give away up to £3,000 each year without any tax liability on anyone's part. So can I achieve my aim by doing the following....

Give each child as follows...£750 from this years 'allowance' and £750 from last year's (as I didn't make any gifts last year). And then can my spouse do the same, bearing in mind what is mine is hers etc etc .

If yes, then as the money will come from a joint bank account (my wife and me) can I just transfer £3,000 by BACS to each, or should I/we do it in two lots of £1,500 ?

Finally - I would like to give another relative about £500. Can this be on basis of £250 this year and £250 last year, or should it be £250 from my wife and same from me ?

Although I hope to last at least another 7 years, I just don't want to expose anyone to the idea of the gifts beings PETs.

Thanks in advance.

Ted

jimclark1967

Hi Ted, welcome to MSE :beer:

Your plan sounds spot on. The £250 small gifts exemption can't be carried back so the £500 gift would have to be £250 from both yourself and your wife.

There shouldn't be any issue with making a single payment from the joint bank account - just keep records of what you've done in case HMRC want to investigate.

JC

interest_Ted

Many thanks JC. Much appreciated.

Just a small further thought - cash gifts at Christmas and birthdays etc.

Are these, strictly speaking, supposed to be covered within the £250 to anyone rule? Something at the back of my mind says that cash gifts at such times are excluded altogether providing they are reasonable. So for example a few £20 notes inside the kids' (or anyone else's) cards would be acceptable, and not considered, strictly speaking, to put us over the £3k or £250 limits.

Thanks again

Ted

Tiggs_2

I dont think HMRC will hunt you down if you die within 7 years of sticking a fiver in a crimbo card

EdInvestor

BTW you can give unlimited regular gifts (ex Christmas and birthdays) out of your income ( as opposed to capital) without incurring any IHT liability at all, as long as they don't have an impact on your lifestyle.

That's in addition to the 3k a year and small gifts allowances.

Robert_Sterling

You give your partner £6000.
Then you each give each of your children £1500 each.
This assumes niether of you used any of your previous year's £3000 allowance.

snowie69

How much can my eldly mother gift out per year without affecting her state benifits:)

RayWolfe

If she is on benefits you should not even be considering taking money from her. Does she, do you, know what the future holds.

bobbyj_2

Maybe she could give you a few quid towards english lessons.

Harry_Powell

bobbyj wrote: »

Maybe she could give you a few quid towards english lessons.

They're free here:

http://www.english-online.org.uk/

Mum can keep her benefits after all!

Rocksteddie

Does anyone know if there is a tax liability if I give my son & his wife a £20k gift to help them put a deposit down on their house?