Loans to adult children, without incurring inheritance tax.

the_Womble

Hello,
Our son and long term girlfriend are desperately saving for IVF treatment. We wish to help them but cannot afford to give them money as due to our situation, we will need it ourselves in a few years. We can however loan them some, over the £3,000, but if we do not survive more than seven years, we do not wish them to incur any inheritance tax on the money we loan them. We did not give them any money last year, so are we definitely safe to give them up to £6,000 in one go? Thanks.

CLAPTON

if you are a married couple then each can give 3k this year and 3k carried over from last year so in total you can give 6k each i.e. 12k in total without this being a potentially exempt gift. (i.e. it doesn't count for IHT purposes at all)

however if it is a loan then it remains your money and so will form part of your estate when you die; 7 years will then have nothing to do with it as the 7 year rules applies to gifts.