IHT and PETs

Hitting

Message title should be IHT Gifts from Income

CLAPTON

gifts from income can be made to anyone, in any amount and any frequency without incurring an IHT liability

getmore4less

CLAPTON wrote: »

gifts from income can be made to anyone, in any amount and any frequency without incurring an IHT liability

The above is insuficient.

http://www.hmrc.gov.uk/manuals/ihtmanual/IHTM14231.htm

worth a read if trying to go for the income exemptions

in particular

http://www.hmrc.gov.uk/manuals/ihtmanual/IHTM14241.htm

The dictionary definition of ‘normal’ includes standard, regular, typical, habitual or usual. For the purpose of this exemption, ‘normal’ means normal for the transferor and not for the average person. In most cases, it will be clear whether or not there is a pattern of giving, but it is not always that simple.
It is possible that a number of gifts made by one person may not qualify. It is also possible for a single gift to qualify if it is or is intended to be the first of a pattern and there is evidence of this. You will need to analyse all the facts in cases of doubt to see if a pattern can be found (IHTM14242).
Factors to take into account in looking at any pattern of gifts include the frequency and amounts, the nature of the gifts, the identity of the donees and the reasons for the gifts (IHTM14243).

Hitting

Thanks for replies,but what about Family point?

getmore4less

Hitting wrote: »

Thanks for replies,but what about Family point?

As long as the gifts from income meet the criteria(read the above link and follow the links in that)) they are OK

Family makes no difference except spouse/civil partner but these come under a different exemption.

Hitting

The articles mentioned do not cover my point!

Can I gift x amount one year to person a and the next year the same amount x to another person b, and so on over a number of years?

getmore4less

Hitting wrote: »

The articles mentioned do not cover my point!

Can I gift x amount one year to person a and the next year the same amount x to another person b, and so on over a number of years?

did you read this page
http://www.hmrc.gov.uk/manuals/ihtmanual/IHTM14243.htm
Identity of donees

Gifts made to donees in the same category can usually, but not always, be considered together, for example, birthday gifts to grandchildren. However, gifts made will often fall into different categories such as gifts to family on the one hand and gifts to charitable organisations on the other. A proven habit of making gifts of one sort has no apparent bearing on the question of whether gifts of the other kind were normal. But provided that the gifts in question belong to one category, it does not matter that the individual recipients may have varied.

Hitting

Thank you for that - now wiser on that point.

If the gift is not specific,like Birthday present, but just a cash gift, would this be ok, and could the value change from year to year as well as going to different members of family?

getmore4less

what the HMRC manual does is give the tax man guidance on how to look at claims.

So you need to come up with reasons that fit the criteria.

the first link gave 3 critria work through them and follow ALL the links.

it will depend, variable amounts and different people will not rule out gifts from income if you meet the criteria.

How are you going to decide how much to give and who will get it. work back from that

Hitting

Thank you , I need to study links more closely!

On the subject of PETs, Does the 7 year rule apply to calendar years or Tax years?