Same Sex Couples Tax Issues

Twohoots_3

My partner has just inherited her late mother's estate, it does not exceed the IHT threshold. My partner, being the kind sharing type would like to pay off a couple of my loans, these exceed the £3000 limit for a gift in this tax year. She doesn't want to get either of us into any bother with the tax man, but is concerned as to how it would be interpreted if she were to give me the money to pay off the said loans. The inheritance money is currently in our joint current and savings account.
Our understanding is that she can give me any amount she so wishes and I would not be liable to IHT providing she lives beyond the next 7 years. Is this right?
Does it make any difference who actually signs the cheques to the loan/credit companies?
This is my first posting on this amazing site, so bear with me if I have made any mistakes!!
Two Hoots
???

Rafter

The 'gift' to pay off your loans will be treated at a PET (potentially exempt transfer).

You are right about the 7 year rule and there is also 'taper relief' after a few years which would reduce your liablilty. So the maximum liability would be 40% of £3000 or £1200 at teh beginning.

You don't need to declare anything to the inland revenue now, but would need to if anything happened and it would be your responsibility to pay the tax bill.

As you may know the Civil Partnerships bill was passed by the house of commons but blocked by the Lords earlier this year. This proposes to harmonise the tax laws so transfers between civil partners would be exempt in the same way as they are between husband and wife.

For now, make sure if you buy a house together the house reverts to the surviving partner, although a tax bill may still arise. Make sure you both have a will as well.

Not sure what the timetable is for trying to get the bill approved. The objections were based on the fact that the bill discriminated against siblings who had been living together for a long time. This rather misses the point and was beyond the scope of the bill, but hopefully it will be sorted out soon.

For me and my partner it is a far more important issue than fox hunting!

R

Robert_Sterling_3

Your partner can give you £3000 now.
Your partner can give you £3000 for the year 2003-2004
if this £3000 tax free was not used up in that year.
I will need to know how much more debt is to be paid off to advise you further.
I have a few ideas.