Giving money away to children - pitfalls? Suggestions?

birdofafeather

How close to popping your clogs are you? The closer you are the more worried you need to be. Especially as anything given away within 7 years of your death is inheritancs taxable. Remember this applies even if you keel over tomorrow so log all of it. 

Tbh easiest thing seems to be putting the money in a trust, stops young children !!!!!! about with it. 

Albermarle

birdofafeather said:

How close to popping your clogs are you? The closer you are the more worried you need to be. Especially as anything given away within 7 years of your death is inheritancs taxable. Remember this applies even if you keel over tomorrow so log all of it. 

Tbh easiest thing seems to be putting the money in a trust, stops young children !!!!!! about with it. 

Most people have no idea when they will 'pop their clogs' and if you had  read all the thread the subject of IHT was mentioned several times already.
Also many comments that trusts were not easy to manage, and often caused more hassle than they were worth .

metron

birdofafeather said:

How close to popping your clogs are you? The closer you are the more worried you need to be. Especially as anything given away within 7 years of your death is inheritancs taxable. Remember this applies even if you keel over tomorrow so log all of it. 

Tbh easiest thing seems to be putting the money in a trust, stops young children !!!!!! about with it. 

Immediate 20% IHT charge if you put it into a trust - discretionary trusts are very useful vehicles, and I have used them, but not this time.

Life expectancy? Who knows. Put it this way, statistically my wife has a greater life expectancy than I have, even accounting only for age and sex, so the money will be gifted formally to her (even though it's in a joint account) by me, and she will make the gift to our son.

She has a better chance of making it to years 3/4/5/6 and 7 than I have to get some or all of the taper relief on the PET and reduce the tax.

noh

metron said:

birdofafeather said:

How close to popping your clogs are you? The closer you are the more worried you need to be. Especially as anything given away within 7 years of your death is inheritancs taxable. Remember this applies even if you keel over tomorrow so log all of it. 

Tbh easiest thing seems to be putting the money in a trust, stops young children !!!!!! about with it. 

Immediate 20% IHT charge if you put it into a trust - discretionary trusts are very useful vehicles, and I have used them, but not this time.

Life expectancy? Who knows. Put it this way, statistically my wife has a greater life expectancy than I have, even accounting only for age and sex, so the money will be gifted formally to her (even though it's in a joint account) by me, and she will make the gift to our son.

She has a better chance of making it to years 3/4/5/6 and 7 than I have to get some or all of the taper relief on the PET and reduce the tax.

How much are you giving away?

"Any gift which sits inside the available nil rate band (NRB) – currently up to £325,000 or up to £650,000 if a transferable nil rate band is available – cannot benefit from taper relief."
https://www.canadalife.co.uk/technical-support/taper-relief/