Gifts and tax

zygurat789

fiscalfreckles wrote: »

One part of all this that I don't get...How on earth does anybody ever prove what someone gave as a gift? Say they gifted cash to their grandchild above the £3k/£6k limit and then passed away within a year or two?

It's like all the other ways of self assessing, income tax, corporation tax, VAT etc. It's up to the declarer to keep adequate records and tell the truth or if HMRC find out about it...................

antrobus

zygurat789 wrote: »

It's like all the other ways of self assessing, income tax, corporation tax, VAT etc. It's up to the declarer to keep adequate records and tell the truth or if HMRC find out about it...................

Except that in the case of IHT and lifetime gifts, it's likely that the "declarer" will be dead by the time the question arises, and therefore in no position to tell HMRC anything at all.:)

Newbold wrote: »

In practice it's an impossibility for executors, unless the deceased left full records (which most don't).

HMRC would investigate larger estates, no doubt, but only, I imagine, if they have some evidence to suggest that the executors haven't made a complete declaration.

That's about the size of it.

zygurat789

antrobus wrote: »

Except that in the case of IHT and lifetime gifts, it's likely that the "declarer" will be dead by the time the question arises, and therefore in no position to tell HMRC anything at all.

.

That is why "adequate records" should be kept. A requirement of all tax reporting.

CLAPTON

zygurat789 wrote: »

That is why "adequate records" should be kept. A requirement of all tax reporting.

there is absolutely no requirement on me to keep records of gifts made.

Mojisola

d712 wrote: »

What are the rules regarding cash gifts to relatives and its tax implications?

For example if I wanted to make a cash gift to a relative is there a limit to much it could be and how often I could do it (assuming it was the same recipient each time)?

If you withdrew cash to give to someone else and they kept it as cash, who would know about it?

antrobus

zygurat789 wrote: »

That is why "adequate records" should be kept. A requirement of all tax reporting.

That really misses the point.

As far as IHT and lifetime gifts are concerned, the lack of a record of any lifetime gifts could mean either, (a) that there were no gifts to record, or (b) that the donor did make some gifts, but failed to record them. When the time comes to decide which of these two scenarios applies, the donor will be no position to offer any assistance in deciding which applies.

Of course, as far as IHT is concerned, HMRC will proclaim that "good record keeping is essential" and emphasise the "importance of lifetime records" in respect of "gifts made" in order to ensure that the IHT 400 is properly completed. On the other hand, as one practising solicitor once put it to me, 'if you don't tell me, I won't know about it':).

From that point of view, Newbold has it exactly right. If you're the Duke of Westminster, HMRC will make detailed enquiries regarding your estate when you finally snuff it; if you're Joe Bloggs they're very unlikely to ask to see the last 6 years worth of bank statements and start asking detailed questions about this or that payment, particularly as the answers they are likely to get will just be a series of 'don't knows'.

antrobus

Mojisola wrote: »

If you withdrew cash to give to someone else and they kept it as cash, who would know about it?

Strictly speaking the same rules apply to cash as any other kind of gift. Of course, if only the donor and the donee are aware of the transaction, and don't tell anyone else.....

Mojisola

antrobus wrote: »

Strictly speaking the same rules apply to cash as any other kind of gift. Of course, if only the donor and the donee are aware of the transaction, and don't tell anyone else.....

Exactly............

zygurat789

antrobus wrote: »

Strictly speaking the same rules apply to cash as any other kind of gift. Of course, if only the donor and the donee are aware of the transaction, and don't tell anyone else.....

You make it sound as if you are advocating not telling HMRC the whiole truth.

CLAPTON

zygurat789 wrote: »

You make it sound as if you are advocating not telling HMRC the whiole truth.

of course not, no-one is advocate misleading HMRC however, I am particularly bad at keeping records about my expenditure