Wedding gift from Parents

Joeycat

Hi everyone


I'm hoping someone can answer a couple of questions I have about Tax implications for financial gifts from Parents to their Children.


I've read recently that Parents can gift £5000 if one of their children marries, I got married 11 years ago & I wasn't given any money from my parents, can I receive that gift now from them? 11 years later? Also is it £5000 from each parent making a Tax free amount of £10000?


Also there are four children & I am aware a Parent can give up to £3000 as a total in a given year, that just works out at £750 per child, is there no other way that more money can be gifted without Tax implications?


I realise that Parents can give away as much as they want however if the amount is over £3000 & the parent passes away within 7 years(of giving the gift) then there are Tax implications.


Thank you
Joey

Savvy_Sue

As you say, your parents can give away as much as they like, but I'd be very surprised if they could give you money for your marriage 11 years ago and have that exempt from the IHT seven year rules.

But the first question is, will your parents' estates be liable to IHT in any case?

And how old are they, and are they in good health or not? Because if not, is it wise to give money away in any case?

Linton

Joeycat wrote: »

Hi everyone


I'm hoping someone can answer a couple of questions I have about Tax implications for financial gifts from Parents to their Children.


I've read recently that Parents can gift £5000 if one of their children marries, I got married 11 years ago & I wasn't given any money from my parents, can I receive that gift now from them? 11 years later? Also is it £5000 from each parent making a Tax free amount of £10000?


Also there are four children & I am aware a Parent can give up to £3000 as a total in a given year, that just works out at £750 per child, is there no other way that more money can be gifted without Tax implications?


I realise that Parents can give away as much as they want however if the amount is over £3000 & the parent passes away within 7 years(of giving the gift) then there are Tax implications.


Thank you
Joey

People can give as much as they like from income without tax implications. They must keep detailed records to prove that the gift really was from income and not savings, was part of normal expenditure and didnt affect their normal standard of living.

Of course if the total estate including gifts in the previous 7 years is less than the tax allowance there isnt any tax to pay anyway.

kidmugsy

The wedding gifts have to be "in contemplation of marriage" (or words close to that). In other words they have to be given shortly before the wedding.


As for the £3k p.a., they can also give away an exempt £250 p.a. to as many people as they like, except anyone who shared in the £3k.

As Linton says, regular gifts from surplus income are also exempt.

xylophone

http://www.which.co.uk/money/tax/guides/inheritance-tax-explained/inheritance-tax-planning-and-tax-free-gifts/

Each parent can give £3000 and if last year's allowance was unused then it can be carried forward.

Therefore your parents could potentially gift you £12,000 between them.

See also https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band

https://www.gov.uk/inheritance-tax