How to record cash gift

kalamater

I am contemplating a cash gift (probably in excess of the allowance) to my niece to help her purchase a house. I am aware of the tax implications if I die within 7 years.
a) How do I record this transaction? Is there a formal process or is it suffice I keep my own record
b) If I jointly gift with my spouse, presumably it would be regarded as, the total divided by 2, and then regarded as 2 such gifts, one from each of us ? (hope that makes sense)

Keep_pedalling

Any non exempt gifts you make should be recorded and be easily available to your executor(s). I keep a record of our gifts in a spreadsheet which I provide annual updates to our IFA and the solicitor who holds our wills.

Yes, if you make this a joint gift it will be a gift from each of you, which means you can also use 2 lots of annual exemption (4 if neater of you used your exemptions from the previous year)

There are not actually any IHT implications in making such a gift, you estate will pay the same IHT if you die within 7 years as it would have done if you had not made the gift.

You sound like a great uncle to have.

calcotti

Keep_pedalling said:

There are not actually any IHT implications in making such a gift, you estate will pay the same IHT if you die within 7 years as it would have done if you had not made the gift.

Surely the amounts IHT starts to reduce after 3 years.

Jeremy535897

calcotti said:

Keep_pedalling said:

There are not actually any IHT implications in making such a gift, you estate will pay the same IHT if you die within 7 years as it would have done if you had not made the gift.

Surely the amounts IHT starts to reduce after 3 years.

If the gift is joint, it is extremely unlikely that it will exceed £650,000, and assuming no other non-exempt gifts made in the previous seven years, taper relief will not apply to reduce the tax on the estate.

Keep_pedalling

calcotti said:

Keep_pedalling said:

There are not actually any IHT implications in making such a gift, you estate will pay the same IHT if you die within 7 years as it would have done if you had not made the gift.

Surely the amounts IHT starts to reduce after 3 years.

From - https://www.gov.uk/inheritance-tax/gifts

Taper relief only applies if the total value of gifts made in the 7 years before you die is over the £325,000 tax-free threshold.

What the page fails to say is that TR only applies to to the part of the gift over £325k 

calcotti

Keep_pedalling said:

What the page fails to say is that TR only applies to to the part of the gift over £325k 

Obviously the taper would not matter if no tax was due anyway.

kalamater

Thank you for the comments. I think my primary concern was the recording of any such gift - looks like another spreadsheet !

dales1

You could use form IHT 403 as your record, to ensure all the relevant details are noted down.