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Joint accounts, when is money in Gifting, need advice please

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  • dales1
    dales1 Posts: 268 Forumite
    Eighth Anniversary 100 Posts Name Dropper
    Yes, that's so.

    So, to make life easier for my executor, I maintain my records of gifts, income and expenditure on form IHT 403 (available on HMRC website.

    Dales.
  • Linton
    Linton Posts: 18,154 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    xylophone wrote: »
    It seems to me that for IHT purposes, when the IHT account is submitted, the executor of the estate would have to demonstrate that gifts in excess of the allowance were regular and made from surplus income over expenditure.

    Yes. Some more detail from experience....

    "regular" isnt regarded as something to be checked mathematically. Perhaps "customary" would be a clearer word. Also the income over expenditure test can be spread over several years. It isnt annually. In general the conditions are not well defined, but it seems to be the case that as long as you appear to be behaving reasonably HMRC wont object.
  • Eco_Miser
    Eco_Miser Posts: 4,847 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    xylophone wrote: »
    Gifts are not taxable anyway,
    Not exactly true - supposing the gift were say, an oil painting or a second home or a parcel of shares....
    OK, I've amended my post for the benefit of any future readers.
    Eco Miser
    Saving money for well over half a century
  • happyhero
    happyhero Posts: 1,277 Forumite
    Part of the Furniture 500 Posts
    Thank you all of you for your help but what shall I do?

    Shall I just take the profits through the joint account as we have been doing but now with no concern for the £3000 annual limit taking these rules instead to apply for our situation?

    Also considering how we are doing this, i.e. selling part of the capital to get the pot back to its original figure and taking the growth as profits, can this be acceptable under these rules; its not effecting my Stepfathers standard of living and is his choice to do this?

    As Linton put it, HMRC wont object if we appear to behave reasonably; is selling capital but only for the purpose of reducing the pot to its original size an acceptable method???
  • dales1
    dales1 Posts: 268 Forumite
    Eighth Anniversary 100 Posts Name Dropper
    edited 21 March 2017 at 4:47PM
    Form IHT 403 will have to be filled out sooner or later.
    So why not take a look at it now, to get some idea of how HMRC views things.

    I would imagine that selling capital which has arisen from dividend income in ACC units would be validly treated as income.
    But selling capital arising from capital growth, I would guess, would not be capable of treating as income. You would have to use the £3,000 anuual exemption in order to distribute these funds.
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