£3000 pa gift allowance/IHT

castle96

I want to gift 3 sons some £. Allowance is £3 pa. So is that £3k for 18/19 and £3k for 19/20. Ie I CAN 'go back' 1 year... £6k total = £2k each YES?

[Deleted User]

Hi,


correct, here's a link to IHT gifts,



Exempted gifts
You can give away £3,000 worth of gifts each tax year (6 April to 5 April) without them being added to the value of your estate. This is known as your ‘annual exemption’.
You can carry any unused annual exemption forward to the next year - but only for one year.

Tom99

You can give them as much as you like you don't have to limit it to £3,000pa, just that anything above that level might be subject to IHT if you die within 7yrs.

Mojisola

castle96 wrote: »

I want to gift 3 sons some £. Allowance is £3 pa. So is that £3k for 18/19 and £3k for 19/20. Ie I CAN 'go back' 1 year... £6k total = £2k each YES?

Yes - and, if you have a spouse, he/she also has the same allowance.

Keep_pedalling

You can gift as much as you want the £3k per year is simply the amount you can gift that does not have to wait 7 years to fall out of your estate.

Going by your other recent thread you have just inherited a large sum of money, so if you are looking at reducing your own IHT liability you would be better off giving them a one off larger gift. If you do this by deed of variation then the effect will be that it was never a part of your estate. You have 2 years from the date of the death of the person who left you this money.

You can of cause still use your annual exempt allowance on top of this.

NCWB

Do I understand correctly that if you give someone more than the £3,000 Allowance, then it is only the Net amount which falls into my Estate, if I die within 7 years of the gift?
eg If I give my Daughter £7,500 within 7 years of my death (and have 2 years of the £3k allowance to use) then the amount accountable within my Estate is £1,500?
Many thanks, Nick

Jeremy535897

That is correct, otherwise the exemption would have no purpose.

badger09

castle96 said:

I want to gift 3 sons some £. Allowance is £3 pa. So is that £3k for 18/19 and £3k for 19/20. Ie I CAN 'go back' 1 year... £6k total = £2k each YES?

For accuracy  - as its now tax year 2020/21, you can use this year's & last year's (2019/20) allowances

castle96

did 2k each last year. Have done £1k each just. Lucky fellas !

maxpaul

Could a parent give money to a child in the form of paying off a credit card or loan to avoid it being governed by the annual gift allowance?  Or would this still be seen as a gift in the same way that a cash gift would be?

Linton

maxpaul said:

Could a parent give money to a child in the form of paying off a credit card or loan to avoid it being governed by the annual gift allowance?  Or would this still be seen as a gift in the same way that a cash gift would be?

A gift doesnt need to be in cash.  It could be any transfer of value such as a car or a holiday or paying off a credit card. HMRC arent going to make tax avoidance that easy.