costs of wedding tax position

ayresrock2

If i give my daughter money to pay for the caterers, marquee etc is that a gift - they want to organise it all themselves but im worried that my contribution will be considered a gift for inheritance tax purposes (I understand the 7 year rule - and the inheritance tax exemptions) - even if she keeps the bills?

or should I pay the bills direct-

so before i hand over £5000 for her to spend I need to be sure that it wont be seen as a gift

John_Pierpoint

http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm#3


Wedding gifts/civil partnership ceremony gifts

Wedding or civil partnership ceremony gifts are exempt from Inheritance Tax, subject to certain limits:

• parents can each give cash or gifts worth £5,000
• grandparents and great grandparents can each give cash or gifts worth £2,500
• anyone else can give cash or gifts worth £1,000

You have to make the gift - or promise to make it - on or shortly before the date of the wedding or civil partnership ceremony. If the ceremony is called off and you still make the gift - or if you make the gift after the ceremony without having promised it first - this exemption won't apply.

I cannot really see a problem if you give the couple a budget of £5K and a pre-signed cheque book to pay the suppliers and give the couple another £5K cheque on the wedding day.That is what parents are for?;)

agrinnall

I think you may be OK. I read in another thread recently (and looked up the link to the HMRC page to confirm it) that there is an additional allowance for wedding gifts of £3000. Combined with the annual gift exemption of another £3000 your contribution of £5000 should be within the allowable limits.

Edit: J_P got in ahead of me, with better information.

CLAPTON

ayresrock2 wrote: »

If i give my daughter money to pay for the caterers, marquee etc is that a gift - they want to organise it all themselves but im worried that my contribution will be considered a gift for inheritance tax purposes (I understand the 7 year rule - and the inheritance tax exemptions) - even if she keeps the bills?

or should I pay the bills direct-

so before i hand over £5000 for her to spend I need to be sure that it wont be seen as a gift

out of interest

if (and I hope you don't) you die within 7 years but haven't made any gifts, what will happen to your estate IHT wise?