Gifts - Will the recipient be liable for tax

Spottie

I am aware that I can give around £3000. a year

Rather than give a yearly lump sum, if I give £250 a month to my child (who is working and paying tax - just the standard rate) will they have to declare this as unearned income and pay tax on this gift ?

TadleyBaggie

No tax on gifts.

CLAPTON

Spottie wrote: »

I am aware that I can give around £3000. a year

Rather than give a yearly lump sum, if I give £250 a month to my child (who is working and paying tax - just the standard rate) will they have to declare this as unearned income and pay tax on this gift ?

there is no limit on what you can give to anyone without any direct taxation

the 3,000 limit you are aware of is to do with inheritance tax if you die in the next 7 years... is that your concern?

Spottie

CLAPTON wrote: »

there is no limit on what you can give to anyone without any direct taxation

the 3,000 limit you are aware of is to do with inheritance tax if you die in the next 7 years... is that your concern?

No I am not worried about Inhertitance tax, I just dont want the recipient to have to pay tax on the gift, be it a yearly or monthly gift.

So are all gifts tax free ?

CLAPTON

Spottie wrote: »

No I am not worried about Inhertitance tax, I just dont want the recipient to have to pay tax on the gift, be it a yearly or monthly gift.

So are all gifts tax free ?

yes all gifts are free of tax to the recipient.

IHT is a potential factor if the amount is over 3k per annum and you die within 7 years

jennifernil

But, if you have enough income to gift £250 per month without it affecting your standard of living, then you can do this AND gift the £3000 annual exemption.(for IHT)

Davide123

jennifernil wrote: »

But, if you have enough income to gift £250 per month without it affecting your standard of living, then you can do this AND gift the £3000 annual exemption.(for IHT)

Yes, gifts out of income exempt..... If same lifestyle etc maintained

xylophone

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

Credit-Crunched

All the above is correct, the only tax the recipient will pay is any interest / growth on the funds after they receive he money

AlwaysLearnin

Just be aware of the £100 rule iro interest earned on amounts from parents

http://www.hmrc.gov.uk/individuals/savings-income.htm

nomunnofun

AlwaysLearnin wrote: »

Just be aware of the £100 rule iro interest earned on amounts from parents

http://www.hmrc.gov.uk/individuals/savings-income.htm

Yes - but only if the child is under 18 which may not be the case for the op as the child is working.