Gifts to adult children

Jeremy535897

Yes you should. Each of you maintains their own IHT 403.

diystarter7

Hi

Does it really matter if the IHT form 403 is completed? I ask as most people will gift from their current accounts and many have joint accounts like us. All the money that comes in goes out has an electronic trail. I do see the point for the OP as its a monthly thing but when we do gifts, more recently from our joint accounts we write in something like , "gift to DiyJnr from dad/mum/..."  you are limited re a number of letters but that it. Larger gifts have been written down on a letter.

It is a very helpful thread as well as educational.

Thanks

Jeremy535897

Since the IHT 403 will need to be completed if the exemption is to be claimed, you may as well do it in advance.

NoodleDoodleMan

I've just stumbled upon this thread and would welcome any clear advice and guidance.

We are now in a position to assist our son and daughter in law with money to help reduce their mortgage which renews every three years and is due next month for review.

I was under the impression that my wife and I could gift each of them £3,000.00 x 2, making a total of £12,000 annually without HMRC oversight ?

Reading previous responses above that doesn't appear to be the "real" limit in practice. 

Can we give more than the £12,000.00 - and does it need to be provided from us as two separate identifiable sources ?

Albermarle

NoodleDoodleMan said:

I've just stumbled upon this thread and would welcome any clear advice and guidance.

We are now in a position to assist our son and daughter in law with money to help reduce their mortgage which renews every three years and is due next month for review.

I was under the impression that my wife and I could gift each of them £3,000.00 x 2, making a total of £12,000 annually without HMRC oversight ?No you can not gift £3K to both children, just £3K each in total  from you and your wife pa. 

Reading previous responses above that doesn't appear to be the "real" limit in practice. 

Can we give more than the £12,000.00 - and does it need to be provided from us as two separate identifiable sources ?

The thread is two years old. Just for info for the future , it is better practice just to start your own new thread.

As discussed in the thread, there two separate issues.

Gifts from income- this is quite a complicated area. Basically you can give away income you do not need, without any IHT implications. However proving this is what is happening can be quite tricky, with some grey areas about what constitutes income and excess income. It is better explained by other posters in the thread.

Gifts without reservation - These are one off gifts, above the value of £3,000 pa . I will just copy my own post below, which I think explains well enough.

 You can give as much as you like, to who you like, and HMRC are not interested.

The issues/rules about gifts, are only relevant if you are likely to pay inheritance tax on your estate, and you die within 7 years of making the gifts.
Even then there is nothing stopping you giving large gifts, just that if you die within 7 years, the gifts will still be counted as part of your estate for IHT calculation purposes. So nothing actually lost.

The only real issue about making large gifts, is that the recipient is then the owner, and if you ever wanted it back they could say no.
Also as mentioned above if the gift meant that you had to rely on the council for care, then they would not be happy with that .

NoodleDoodleMan

Thanks, very helpful.

No situation where  we would seek any gifted monies returned.

My wife and I have power of attonery granted to the survivor, thereafter to our son, in order to manage the house scenario, our biggest asset. 

Albermarle

Be aware that the mortgage provider may ask your son where the money has come from, and you may have to sign something that you are making an outright gift ( not some kind of loan).