We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
£3,000 Annual Gift Exemption Question

Curious_Moose
Posts: 710 Forumite


This is my understanding based on the government's website, so please correct if wrong.
You can gift someone £3,000 each tax year without any tax liability. So if the donor dies it would not be a tax issue for either inheritance tax or the individual receiving the £3,000. If the donor does not die, again no issue for either party.
Q - Does the recipient need to declare the £3,000 to HMRC at any point, or as it is a gift within the limit, can HMRC be left out of the transaction?
Q - If Person A gifts £3,000 to Person B and Person C also gifts £3,000 to Person B does that change anything as Person B has now received two gifts of £3,000 rather than one. Or is the restriction on the giver rather than the receiver?
Note - The above relates to the inheritance tax rules from the government website, so I'm not sure if that complicates this in any way. I'm basically looking to clarify if you can gift £3,000 to someone without HMRC needing to be informed.
How Inheritance Tax works: thresholds, rules and allowances: Rules on giving gifts - GOV.UK (www.gov.uk)
Thanks
You can gift someone £3,000 each tax year without any tax liability. So if the donor dies it would not be a tax issue for either inheritance tax or the individual receiving the £3,000. If the donor does not die, again no issue for either party.
Q - Does the recipient need to declare the £3,000 to HMRC at any point, or as it is a gift within the limit, can HMRC be left out of the transaction?
Q - If Person A gifts £3,000 to Person B and Person C also gifts £3,000 to Person B does that change anything as Person B has now received two gifts of £3,000 rather than one. Or is the restriction on the giver rather than the receiver?
Note - The above relates to the inheritance tax rules from the government website, so I'm not sure if that complicates this in any way. I'm basically looking to clarify if you can gift £3,000 to someone without HMRC needing to be informed.
How Inheritance Tax works: thresholds, rules and allowances: Rules on giving gifts - GOV.UK (www.gov.uk)
Thanks
0
Comments
-
No need to inform HMRC. However it is a good idea to record the gifts, as it will help the executor of your will to sort your estate out.
In fact no need to inform HMRC of any gifts.
Perhaps do not be fixated on the £3K pa. If you give more away and then unfortunately die within 7 years, you will not pay any more IHT than you would have done if not making the gift.1 -
Thanks for the quick reply. Just to clarify:
1) Two people can each separately gift £3,000 to the same person in the same tax year and HMRC does not need to be informed by anyone. The recipient doesn't need to declare it as "income" anywhere
2) If either of the donors die within 7 years, it is still not an issue for HMRC as it is allowed for under the annual gift exemption
0 -
Curious_Moose said:Thanks for the quick reply. Just to clarify:
1) Two people can each separately gift £3,000 to the same person in the same tax year and HMRC does not need to be informed by anyone. The recipient doesn't need to declare it as "income" anywhere
2) If either of the donors die within 7 years, it is still not an issue for HMRC as it is allowed for under the annual gift exemptionOn informing HMRC - you don’t have to declare any gift, regardless of its size.There is also the potential for unlimited regular gifts out of income to peruse. Look under ‘If you make regular payments’Of course, none of this is relevant if the estate potentially falls below the threshold.1 -
Again, thank you for the quick response.0
-
As regards the £3000 exemption, can I use a previous year's exemption, and then carry forward an unused current year's exemption. eg. Assume I have not used the £3000 exemption in 2020-21 tax year. In 2021-22 tax year, I use a £3000 exemption - is this the unused exemption from 2020-21, leaving the 2021-22 exemption available to carry forward to 2022-23? .0
-
pysifr said:As regards the £3000 exemption, can I use a previous year's exemption, and then carry forward an unused current year's exemption. eg. Assume I have not used the £3000 exemption in 2020-21 tax year. In 2021-22 tax year, I use a £3000 exemption - is this the unused exemption from 2020-21, leaving the 2021-22 exemption available to carry forward to 2022-23? .Your only opportunity to utilise the £3000 exemption for 2020/21 is in 2020/21 or, if not used, in 2021/22 by making gifts over £3000 in that year.0
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 350.2K Banking & Borrowing
- 252.8K Reduce Debt & Boost Income
- 453.2K Spending & Discounts
- 243.1K Work, Benefits & Business
- 597.5K Mortgages, Homes & Bills
- 176.5K Life & Family
- 256.1K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards