Tax free gifts

2010

The yearly exemption of £3k when giving a gift to a family member.
Is the £3k the total amount you can give or is it per person.
If you want to give two adult "children" and two grandchildren money.
Is this £3k each or £750?

Also,is this tax allowance per person, can both parents give it?

getmore4less

There is no limit all gifts are tax free.

In most cases they are IHT neutral, the worst case your estate pays the same IHT as you would if you kept the money.

2010

Thanks for the reply but still confused.
From HMRC site.

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.

Each tax year, you can also give away:
wedding or civil ceremony gifts of up to £1,000 per person (£2,500 for a grandchild or great-grandchild, £5,000 for a child)
normal gifts out of your income, for example Christmas or birthday presents - you must be able to maintain your standard of living after making the gift
payments to help with another person’s living costs, such as an elderly relative or a child under 18
gifts to charities and political parties
You can use more than one of these exemptions on the same person - for example, you could give your grandchild gifts for her birthday and wedding in the same tax year.

Keep_pedalling

Any gifts you make over your £3000 annual exemption you should keep a record of and keep those records with a copy of your will to make things easier for your executors.

If you and your spouse have a joint net worth in excess of £1M then you should be thinking of making gifts above £3000 per year to take advantage of the 7 year rule and reduce the amount of IHT your estate may have to pay. If you don’t have that sort of net worth then you don’t really have to worry about IHT planning.

Each of you have an annual allowance of £3000 that can be gifted and will for the purposes of IHT not count as part of your estate. Anything over that will count if you don’t live for 7 years after making the gift. These are known as potentially exempt gifts (PETs)

If you made no gifts in the previous financial year then you can carry that allowance forward, so each of your can make a £6000 exempt gift.

You can make some other exempt gifts. £5000 each for a child in contemplation of marriage, £250 to as many individuals as you wish and as much as you like to charities. If you income exceeds your expenditure you can also make exempt gifts from excess income.

getmore4less

2010 wrote: »

Thanks for the reply but still confused.

Many people seem to think you get taxed more you don't.

Better to think that the amount does not leave your estate for 7 years after it has been given away for tax IHT purposes you still have it.

It the same money taxed once on death

(In most cases it is different money that get taxed as the gift just uses up nil rate band, )

xylophone

The yearly exemption of £3k when giving a gift to a family member.
Is the £3k the total amount you can give or is it per person.
If you want to give two adult "children" and two grandchildren money.
Is this £3k each or £750?[

Also,is this tax allowance per person, can both parents give it?

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm14180

The gift allowances are per person.

For example, John and Mary have one child (Tom) and two grandchildren, Susan and Ann.

John can give £3000 to Tom. Mary can give £3000 to Tom.

John can give £250 to each of Susan and Ann as can Mary.

All the above are within the gift allowance for John and Mary.

See also https://www.gov.uk/inheritance-tax/gifts