Record of gifts given for IHT purposes

horshamdingle

Apart from the £3000 annual exemption and gifts out of surplus income, any gifts of £250 or less (but these cannot be given to recipients of the former) are exempt from IHT, so wont need recording.


There are other exemptions such as wedding gifts (values depend on relationship) and help with living costs - the Money Advice website explains these (sorry can't post a link).

getmore4less

horshamdingle wrote: »

Apart from the £3000 annual exemption and gifts out of surplus income, any gifts of £250 or less (but these cannot be given to recipients of the former) are exempt from IHT, so wont need recording.


There are other exemptions such as wedding gifts (values depend on relationship) and help with living costs - the Money Advice website explains these (sorry can't post a link).

The £250 is total to one individual not single gifts

Ask yourself are you trying to reduce your asset base with gifts.

Day to day paying for meals, flowers, mums shopping etc. Generally only need recording if they get large totals. if you are actively trying to use the gifts from income exemption it is worth reading up some of the guidelines on proof should HMRC require it.

Excess income use is an area you need to be a bit carefull if there is loads. HMRC consider income capitalized after a time if not used unless documented as saving to gift.

Gifts from income need to be regular but that can have a very broad meaning so read up multiple sources for guidance.

Any gifting over the exemptions is usually fairly obvious to the doner record them.

In the real world administrators do no not trawl through 7 years of records looking for gifts. They use common sense and if the relevant asset base is steady and not going down then any smallish regular gifting will generally be ok. The large transactions might need a look.

If you plan IHT reductions through gifting the records you need will become fairly obvious with some research of the HMRC manual and if still not clear professional advice.


Bottom line most day to day does not need records but be aware of the limits and restrictions if trying to minimise IHT and need to offload lots of cash including income.

fcandmp

As my query is directly related to this topic I hope it will be okay in this thread...

I am completing IHT403 for FIL's estate and there are chargeable gifts of just over £6000 (in total) over the past 3 years. I am now completing the final page six and wonder what number goes in the bottom line - Gifts Made? Is this just the total of chargeable gifts, or is it all gifts, I.e. Including all trivial gifts and charitable donations in those years?

I note I have a spreadsheet of all gifts made to family (taken from cheque book stubs and bank statements) and have found it necessary to review all detail, especially as £50 for birthday, plus £100 for Christmas, and then larger £500 amounts some years to grandchildren all need to be added.

The total estate is right on the cusp of IHT being due, and will go over if chargeable gifts are added back in, so want to get this spot on.

Thx

Yorkshireman99

Don't forget you can backdate the £3,000 annual exemption by a year. You can safely ignore the small amounts paid from a current account as being out of income.