Grandparents gifting money to grandchildren

mikeassured

Hi

My mum would like to gift my children some money.

I understand that she can give £3000 per annum per child to be free of inheritance tax. However, I have read that you can use a previous years allowance that was unused?

So, could she give £6000 this year and still be free of inheritance tax rules?

Many thanks


Sue

xylophone

http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm See "Annual exemption".
See also http://www.direct.gov.uk/en/moneytaxandbenefits/managingmoney/planningyourpersonalfinances/dg_10013916

CLAPTON

is your grandmother estate large enough to be liable to IHT?
i.e. 325,000 or 650,00 if her estate benefits from her husband's allowance

if so then when she dies her estate will be liable to IHT

if she give away money now and dies is less than 7 years then her estate will pay the same IHT as if she had given nothing away

if she gives money away now and dies in more than 7 years then the gift will be IHT free so the overall IHT will be less.

Biggles

mikeassured wrote: »

I understand that she can give £3000 per annum per child to be free of inheritance tax. However, I have read that you can use a previous years allowance that was unused?

She could give £3,000 overall, not per child (or per person). But she could use last year's allowance (check xylophone's links for details).

She can also make various small gifts (£250 in a year) to someone, and also check the paragraph headed 'Regular gifts or payments that are part of your normal expenditure'.

But bear in mind that if her estate isn't going to be subject to IHT anyway, she can do what she wants!