Gifts - Will the recipient be liable for tax

zygurat789

Credit-Crunched wrote: »

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

Not if it is invested in an ISA

Credit-Crunched

or a pension

zygurat789

Credit-Crunched wrote: »

or a pension

But a pension is taxed and you have to wait until you reach the required (moveable feast) age.

Spottie

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)

Thanks Jennifer - but a bit confused with this answer - especially the later part .

nomunnofun

Spottie wrote: »

Thanks Jennifer - but a bit confused with this answer - especially the later part .

1) Anyone can give away as much as they like so long as it does not affect their standard of living. The gifts must be regular.

2) Whether they are in a position to do this or not one is allowed to gift £3000 in any one tax year.

So. if you are in the habit of giving your dozen nieces and nephews £1000 every Christmas, the £12000 total payments will qualify. Up to £3000 of any other gifts that are made will also qualify. Hope that helps!

zygurat789

Spottie wrote: »

Thanks Jennifer - but a bit confused with this answer - especially the later part .

You can give ANY amount out of income so long as it does not reduce lifestyle or, more impotantly, your bank balance or investments.
And you can give up to £3,000 pa which will be disregarded for IHT purposes.

Credit-Crunched

zygurat789 wrote: »

But a pension is taxed and you have to wait until you reach the required (moveable feast) age.

Contributions to a pension are not taxable (other than the non reclaimable 10% divi credit)

They may also be non taxable upon receipt if personal allowances allow.

In addition you can take 25% tax free as a lump sum.

Agreed, not ideal, but still possible tax efficiences here

getmore4less

zygurat789 wrote: »

You can give ANY amount out of income so long as it does not reduce lifestyle or, more impotantly, your bank balance or investments.
And you can give up to £3,000 pa which will be disregarded for IHT purposes.

Not if you want to comply with the strict rules of tax exempt from income.

jennifernil

zygurat789 wrote: »

You can give ANY amount out of income so long as it does not reduce lifestyle or, more impotantly, your bank balance or investments.
And you can give up to £3,000 pa which will be disregarded for IHT purposes.

Yes, of course. I only used £250 as that was what the OP was proposing.

le_loup

This, and your other posts are so insightful. Thank you.