Gifts to siblings

biscuitbrown

Is it still the case in the UK that you can give cash to a sibling without any tax implication?

McKneff

There are no tax implications for the receiver in the UK

CLAPTON

biscuitbrown wrote: »

Is it still the case in the UK that you can give cash to a sibling without any tax implication?

the is no tax implications when the gift is made for either party

however if the giver dies within 7 years then the gift may be subject to inheritance tax if the giver's estate is above the IHT allowance (currently 325k or 650k if the estate can take advance of the spouses IHT allowance)

JennyPats

As Clapton says above, the 7 year rule applies for inheritance tax.

SeniorSam

Each person can gift up to one £3,000 in any tax year without any tax implications whatsoever. (only once in a tax year). Additionally gifts of up to £250 to any number of people, but not the same person. Above the £3000 limit, the IHT rule may apply under Potentially Exempt Tax rules.

Sam

ceeforcat

Not necessarily Senior Sam - don't forget regular gifts out of income which, in theory, can be unlimited.

SeniorSam

Ceeforcat is correct, this is also allowed.

However, gifts from income, not capital, need to be set up to be made on a regular basis, from income that does not reduce the givers normal standard of living. Ideally they should be set up on a Standing Order basis, but maintaining a 'paper trail', to satisfy the Revenue is essential as the Revenue are wise to those who try to circumvent this allowance and are likely to look into most cases.
Sam

CLAPTON

SeniorSam wrote: »

Ceeforcat is correct, this is also allowed.

However, gifts from income, not capital, need to be set up to be made on a regular basis, from income that does not reduce the givers normal standard of living. Ideally they should be set up on a Standing Order basis, but maintaining a 'paper trail', to satisfy the Revenue is essential as the Revenue are wise to those who try to circumvent this allowance and are likely to look into most cases.
Sam

how regular is regular? e.g once a year?

on what basis do you say 'ideally on a Standing Order'; I'm not aware of any regulation that mentions SOs

System

I don't see how doing it by regular standing order helps in any way to demonstrate that the money is coming out of income. Someone might be regularly transfering considerable capital every year or month.

Surely to demonstrate that it is affordable out of income requires something like household accounts, demonstrating say an income of £30,000 pa, annual expenditure of £25,000 pa, therefore £5,000 pa affordable without reducing standard of living.

Commonsense says that laying down a paper trail is everything, but a standing order proves nothing. Look at the posts here from people who cycle money around between accounts in order to maximise Vantage interest.

SeniorSam

Clapton,

there are no 'REGULATIONS' regarding S/O, but a bit of common sense suggests that in setting up an S/O, it would show 'intent for regular payments'.

Clifford Pope .... your middle paragraph is absolutely correct and something that would possibly be checked upon where these gifts are made. Some people think they can get round the rules by being crafty. If the payments are 'genuine', then they will be seen as such, but if regular capital sums are needed to support 'Normal Expenditure' when these gifts are being made, then it may not work. I am only trying to be helpful in suggesting ways that may help. As I'm sure we all are.

Sam

PasturesNew

You could set up a Poker Night in your front room ... and lose the lot to a sibling. That'd be tax free.