Inheritance Gift Allowance

Richchad

I am aware that each person can give gifts to family up to 3k plus smaller gifts of £250 unless included in the 3k allowance and also payments can be made from excess income after taking expenditure into account. We will be over the inheritance tax threshold due to value of the house so tax will be due from our estate.

My question is does the 3k allowance etc apply to a couple or do we both have 3k allowance each, I cannot find anything regarding this searching online or perhaps I am mising something here like is it the maximum a child or grandchild can receive?

diystarter7

Richchad said:

I am aware that each person can give gifts to family up to 3k plus smaller gifts of £250 unless included in the 3k allowance and also payments can be made from excess income after taking expenditure into account. We will be over the inheritance tax threshold due to value of the house so tax will be due from our estate.

My question is does the 3k allowance etc apply to a couple or do we both have 3k allowance each, I cannot find anything regarding this searching online or perhaps I am mising something here like is it the maximum a child or grandchild can receive?

Hi

3k each we do this every year last few years

Richchad

diystarter7 said:

Hi

3k each we do this every year last few years

So we can give gifts up to 6k in total, do you have to show which person is giving the gifts each year as we just transfer money to various accounts from our joint account?

Jeremy535897

Gifts from joint accounts are treated as being made equally by the account holders in normal circumstances.

Remember that you can give away what you like without limit. Inheritance tax can only become payable if you die within 7 years of making the gift, and most of the time the tax is no worse than if you hadn't made the gifts and your estate was bigger as a result.

Keep_pedalling

Richchad said:

diystarter7 said:

Hi

3k each we do this every year last few years

So we can give gifts up to 6k in total, do you have to show which person is giving the gifts each year as we just transfer money to various accounts from our joint account?

Gifts up to your annual allowances never have to be declared on an IHT return you only need to maintain records of gifts above that amount, and detailed records of gifts and expenditure if you are using gifts from excess expenditure. If any of you children or grandchildren are planning on getting married don’t forget gifts in contemplation of marriage, £5k each for children, £2.5k for for GC.

Have you allowed for the residential NRB bands which can take your total exemptions up to £1M? 

[Deleted User]

If the gift allowance of £3000 has not been used in the year previous £6000 each can now be gifted. The unused allowance can only be carried forward to the following year. 

Richchad

Keep_pedalling said:

Gifts up to your annual allowances never have to be declared on an IHT return you only need to maintain records of gifts above that amount, and detailed records of gifts and expenditure if you are using gifts from excess expenditure. If any of you children or grandchildren are planning on getting married don’t forget gifts in contemplation of marriage, £5k each for children, £2.5k for for GC.

Have you allowed for the residential NRB bands which can take your total exemptions up to £1M? 

Thanks for reply, yes I was aware of the gifts etc and the NRB band which still will makes liable for tax, mainly due to the house value which I assume will continue to rise and it looks unlikely the inheritance tax allowances will change anytime soon.

Richchad

purdyoaten2 said:

If the gift allowance of £3000 has not been used in the year previous £6000 each can now be gifted. The unused allowance can only be carried forward to the following year. 

Thanks for the heads up, but as we give gifts every year we can't really make use of this rule, but worth mentioning.

Keep_pedalling

Richchad said:

purdyoaten2 said:

If the gift allowance of £3000 has not been used in the year previous £6000 each can now be gifted. The unused allowance can only be carried forward to the following year. 

Thanks for the heads up, but as we give gifts every year we can't really make use of this rule, but worth mentioning.

If you have ample liquid assets then you should think of making one off larger gifts. They won’t fall out of your estate for 7 years but unless either of you has a short life expectancy you can cover the risk with term life insurance to pay the IHT if you meet an untimely end.