£3000 limit for cash gifts

checker6

I know that the maximum amount you can gift to family or friends tax free is £3000 per year. Does this just relate to inheritance tax? If your total estate falls below the inheritance tax threshold of £325000 can you gift any amount of money to your family tax free? I've been searching the internet but can't find a definitive answer. Thanks in advance for any information.

Aretnap

Probably better to ask on the cutting tax board but AIUI yes, gifts are generally not taxed, unless you die within 7 years of making them, in which case they are assessed as part of your estate for inheritance tax purposes - essentially to stop people avoiding inheritance tax by giving away everything they own on their deathbeds. There are allowances within that assessment - for example the £3000/year you mention won't count for inheritance tax purposes, and there are additional allowances for things like wedding presents for your children.

checker6

Thanks I've posted it on the cutting tax board.

robatwork

checker6 wrote: »

I know that the maximum amount you can gift to family or friends tax free is £3000 per year. Does this just relate to inheritance tax?

Yes.

You can gift any amount to anyone at any time as often as you like.

It's just if you die within 7 years that it becomes relevant.

JohnRo

robatwork wrote: »

It's just if you die within 7 years that it becomes relevant.

..and only then if the IHT thresholds are a factor.