what are the rules on gifts?

wend33

I recently came into some money after my father died.

I don't agree with how he divided his money in his will and feel that my brother needs this money more than I do so I want to give it to him (the money is already in my account).

What are the rules about gifting money? In the back of my mind I can give him £3000 per year without any implications (for tax) and I heard that you can also utilise the previous years £3000 if you haven't already done so which means I could give him £6000 in total before April then another £3000 in the new tax year - is this the case?

Then all I need to do is find him an account that will earn a bit of interest for his future!:)

dunstonh

What are the rules about gifting money?

You can gift as much as you like. However, the gift is potentially subject to inheritance tax for 7 years depending on your estate and the amounts involved.

Another option is to do a deed of variation on the Will. If all beneficiaries agree to the change, then a deed of variation will allow you to have the money paid to your brother without any tax concerns.

warwicktiger

This might help too:

https://www.probatewizard.co.uk/guides/what-is-a-deed-of-variation.html

wend33

dunstonh wrote: »

You can gift as much as you like. However, the gift is potentially subject to inheritance tax for 7 years depending on your estate and the amounts involved.

Another option is to do a deed of variation on the Will. If all beneficiaries agree to the change, then a deed of variation will allow you to have the money paid to your brother without any tax concerns.

Thank you very much for your reply. When you say 'all the beneficiaries' does that mean everyone named as a beneficiary in the will? I have looked since looked at HMRC site and found the following:
Annual exemption

You can give away gifts worth up to £3,000 in total in each tax year and these gifts will be exempt from Inheritance Tax when you die. You can carry forward any unused part of the £3,000 exemption to the following year, but if you don't use it in that year, the carried-over exemption expires.

so I wasn't too far wrong in my original thoughts! If it is that everyone has to join in then I mght just drip feed it him @£3k per year... (not that I'm planning on popping my clogs any time soon!!)

Mojisola

dunstonh wrote: »

Another option is to do a deed of variation on the Will. If all beneficiaries agree to the change, then a deed of variation will allow you to have the money paid to your brother without any tax concerns.

I think it's only the beneficiaries who are affected by the deed who have to agree.

grey_gym_sock

there may be no need to limit gifts to £3000 per year. if you give more than that (and you can start with £6000 this year, if you didn't use last year's allowance), then the only effect is that any excess will use part of your inheritance tax limit if you die within 7 years of the gift. this is only relevant if both (a) you die with 7 years and (b) you leave an estate worth over £325k - including those non-exempt gifts.

dunstonh

Mojisola wrote: »

I think it's only the beneficiaries who are affected by the deed who have to agree.

Which would make it even easier to solve without any tax considerations.

Vortigern

Mojisola wrote: »

I think it's only the beneficiaries who are affected by the deed who have to agree.

Would the OP have to use a solicitor to make a deed of variation?