Inheritance tax implications of gifting a car to my daughter

where_are_we

We are upgrading our car and I am gifting the present 7year old car (current value about £3000 - £3,500) to one of my children who still lives at home. We are in our mid-sixties, so for inheritance tax purposes, is it better to formally transfer over "registered keeper" using the V5C form. Could this be the £3000 "annual exemption gift" for IT for this tax year?
The car is registered in my name. Does this mean my wife could make a £3000 gift to one of the other children in the same tax year and it would qualify as a second £3000 "annual exemption gift" for the same tax year?

[Deleted User]

Yes - and if neither used this exemption last year you have the opportunity to increase to £6000 each.

where_are_we

Thanks - so make my daughter the registered owner and use the lower car valuation of £3000.

[Deleted User]

Yes - but is your joint estate likely to exceed £650k?

00ec25

where_are_we wrote: »

Thanks - so make my daughter the registered owner and use the lower car valuation of £3000.

unless you intend to allow her to drive it on your insurance policy then she will need to be the owner of it anyway otherwise her insurance will be very messy since she will be trying to drive a car that does not belong to her

IHT is a bit of a red herring anyway since even in the mid 60's it is not unreasonable to expect you to live for 7 years at which point this gift will be totally outside of IHT anyway under the potentially exempt transfer rule

given your scant knowledge of such IHT basics why do you think you need be concerned by it anyway? Anyone who it will actually affect is seriously wealthy and should be taking professional advice on how to manage it

where_are_we

We live in the London area - own a house worth about £650K and over £100k in savings. We have small pensions and are both non tax payers, so I wouldn`t consider ourselves "seriously wealthy"! I also realise that the new residence nil rate band will probably exempt us from paying IHT, so professional advice wouldn`t be worth it. But who knows what house price rises will occur in the future, so thanks to everyone for their help.

kidmugsy

where_are_we wrote: »

...the new residence nil rate band will probably exempt us from paying IHT

But does that nice Mr Corbyn agree?

(Personally I think the RNRB is bonkers. A sensible Chancellor should scrap it and make the standard IHT allowance a bit bigger in compensation. Maybe £400k would do the trick.)

Ja7188

You're obviously keen to make sure you minimise the impact of IHT so it still might be worth you taking professional advice - as you say, no-one knows what will happen to house prices and you may find yourselves over the limit if they do rise quickly and/ or you come into an inheritance...