Giving money away!!!!!!!!!

56cheffy

I know that you allowed to give up to £3000 p/a away, but I also heard that you can also give money out of income away.

Is this correct and if so how much.

Is this money declared on your Tax return before giving it away or after?

Hope that makes sense!

Hoddie_2

There is no income tax relief for giving away money, but if you're higher rate taxpayer and you're gifting money to a registered charity, you can claim Gift Aid relief.

cash99

The £3000 annual gift exemption applies to Inheritance tax only. You can also use the previous years exemption, id unused in the previous year.

The are also other reliefs on small gifts of under £250 per donee, and gifts on marriage. In addition there is relief for gifts classified as normal expenditure.

Normal expenditure out of income

The exemption from the charge to IHT for normal expenditure out of income has three conditions, all of whichmust be satisfied. It must be shown that the gift:
1.was made as part of the normal expenditure of theperson making the gift (the "transferor");
2.was made out of his income (taking one year with another); and
3.that, after allowing for all transfers of value formingpart of his normal expenditure, the transferor was left with sufficient income to maintain his usual standard of living.

There is no fixed amount for this relief it depends entirely on the individuals circumstances.

If you are thinking of using this relief you probably need professional advice.

oldwiring

This contains a pretty comprehensive list.

56cheffy

My mum in law is selling up and intends giving a one third share of the proceeds to each of her 2 children and a third to my son who is 16 years old, he stands to collect around £30000!!!!!!!!!!!!!!

What if my mum in law (his granny) does not survive 7 years?
As he is not a tax payer yet what would happen?

And how should he invest the money?