Gifting Limits

Mumto2

Can anyone clarify whether the £250 limit for individidual gifts includes any small payments given for Xmas/birthdays or is in addition.

For example, if I gave grandchild A £20 for Xmas & £20 for b'day, could I only give them £210 as an annual gift?

I've copied from the HMRC website, but am still unsure :think:

Gifts up to £250

There’s no Inheritance Tax on individual gifts worth up to £250. You can give as many people as you like up to £250 each in any one tax year.

You can’t give someone another £250 if you’ve given them a gift using a different exemption, eg the £3,000 annual exemption.

If you give someone more than £250 in a tax year, the whole amount counts - the first £250 is not exempt.

Regular gifts from the giver’s income

There’s no Inheritance Tax on gifts from the deceased’s income (after they paid tax) as long as the deceased had enough money to maintain their normal lifestyle. These gifts include:

Christmas, birthday and anniversary presents
life insurance policy premiums
regular payments into a savings account

CLAPTON

you can give anyone UP TO 250 per annum either a lump sum or 250 lots of £1 or anything in between ; it is an ANNUAL allowance.

xylophone

http://www.hl.co.uk/investment-services/junior-isa/inheritance-tax-on-gifts

Using the exemptions you can give up to £250 to the grandchild whether in a lump sum or spread over the year.

You cannot give the grandchild £3000 plus £250.

You cannot give £250 and the birthday gifts on top.

You can give as much as you wish to anybody if you are making regular gifts from income surplus to your requirements for maintaining your usual standard of living.

le_loup

Mumto2 wrote: »

Can anyone clarify whether the £250 limit for individidual gifts includes any small payments given for Xmas/birthdays or is in addition.

You do know that these limits only affect Inheritance Tax?
You can give away anything you like in terms of Income Tax.
There is no Gift Tax.
If you are aware of this, forgive my intervention.

Mumto2

le_loup wrote: »

You do know that these limits only affect Inheritance Tax?
You can give away anything you like in terms of Income Tax.
There is no Gift Tax.
If you are aware of this, forgive my intervention.

So if the person in question is likely to be well under the threshold (they will also have their spouses allowance, so will be £650k), then none of this applies & they can give away their money as they wish?

xylophone

So if the person in question is likely to be well under the threshold (they will also have their spouses allowance, so will be £650k), then none of this applies & they can give away their money as they wish?

If a person knows that short of a win on the lottery, his estate will be well below the IHT threshold, then he can give away as much of his cash he likes without being concerned about IHT.

However, there are other taxes and there may be other considerations.

Giving away a Ming vase or your cottage in the country? Consider CGT implications.

Resenting the idea that you may have to self fund your care home and therefore handing over your savings to your children? Consider Deprivation of Assets implications.....

They're all out to get you....:)

getmore4less

Mumto2 wrote:

Nothing like deprivation of assets intended.

My Dad has POA for my grandad (88) who is now in a care home after being hit by a car. His total estate is currently slightly over IHT threshold, but he would qualify for transferring spouses allowance (my grandma died in 2000)

Dad is considering gifting £250 each per year to me & my children, as well as £3k to himself, so no CGT considerations.

One thought is, my Dad has a brother who has very little contact with his father, hasn't visited in many years & has put in writing by email that he intends to have no further contact. Guess he could dispute the transactions if he decided to?

How do those gifts benefit grandad?

edit: looks like Mumto2 deleted that post while I was replying!

le_loup

getmore4less wrote: »

edit: looks like Mumto2 deleted that post while I was replying!

Weird!
...................

kidmugsy

getmore4less wrote: »

edit: looks like Mumto2 deleted that post while I was replying!

No wonder. "gifting £250 each per year to me & my children, as well as £3k to himself" would be clear breach of trust.

Apodemus

kidmugsy wrote: »

No wonder. "gifting £250 each per year to me & my children, as well as £3k to himself" would be clear breach of trust.

...unless this was specifically included in the POA.

getmore4less

Apodemus wrote: »

...unless this was specifically included in the POA.

Or was something granddad did on a regular basis anyway.