Inheritance Tax : 3 Questions

WLM21

(1)

Can the £3000 exempt gift per year be used as well as the £250 per person gift

Example

Give 1 kid £3000
Give 3 grandkids £250 each

(2)

Can extra money be given away from a pension (private and Govt) to anybody, providing the existing standard of living doesn't change

(3)

The spend spend spend approach seems fine, this was an oiption given on another web site. This seems a good idea, but are there any risks attached as far as the greedy tax man is concerned.

loulou41

I am a bit in the same postion like you. As far as I understand, you can give £3000 to one kid and give £250 each to anybody you want. I have also been told that you can give money from income as long as it does not lower your standard of living. In my case, I am using my some of my NHS pension to give a sum of money to my son every month, this has to follow a poattenr in case income tax check, and this does not lower my standard of living. I am sure somebody more experienced will answer your post. Hope this helps as I am interested in this topic. I do not agree with the approach spend, spend and do not enyoy a heavy social life. I want to be able to help my children.

elliebean_2

You are both correct. So long as the £3,000 and £250 gifts are given to different people. And so long as the regular sums of money are given from income, not capital, and do not affect your standard of living.

There are also exempt gifts which can be given on marriage or civil partnership - £5,000 to each of your children; £2,500 to each of your grandchildren and £1,000 to any of your friends. Gifts to charities and some national institutions are also exempt, but other than that any other gifts are PETs (Potentially Exempt Transfers) which become exempt if the donor survives a further 7 years and if not, are liable for IHT on a sliding scale.