Rules on gifts of up to £250

loopauk

Hi
My grandad would like to gift some of his money to his family. I'm aware gifts of up to £250 do not need to be declared to hmrc.

Could he gift the same family member £250 per week (or however often he feels) and for those gifts to still be tax exempt, or could he only gift £250 once to one individual in a tax year?

Thanks.

marcia_

loopauk said:

Hi
My grandad would like to gift some of his money to his family. I'm aware gifts of up to £250 do not need to be declared to hmrc.

Could he gift the same family member £250 per week (or however often he feels) and for those gifts to still be tax exempt, or could he only gift £250 once to one individual in a tax year?

Thanks.

 There is no reason to report gifts of any amount. There is no tax on gifts. 

Dazed_and_C0nfused

loopauk said:

Hi
My grandad would like to gift some of his money to his family. I'm aware gifts of up to £250 do not need to be declared to hmrc.

Could he gift the same family member £250 per week (or however often he feels) and for those gifts to still be tax exempt, or could he only gift £250 once to one individual in a tax year?

Thanks.

Why do you think gifts need to be reported to HMRC?

Do you have a source for this?

kuratowski

If we're talking about the small gifts exemption for inheritance tax (IHT), it's £250 per person, per year.  The only time gifts are of interest to HMRC is when somebody dies within 7 years of making them.

If your granddad is trying to plan for IHT, he would do well to consult a professional.

[Deleted User]

kuratowski said:

If we're talking about the small gifts exemption for inheritance tax (IHT), it's £250 per person, per year.  The only time gifts are of interest to HMRC is when somebody dies within 7 years of making them.

If your granddad is trying to plan for IHT, he would do well to consult a professional.

Important to note that if the estate is not sufficiently large to attract inheritance tax, HMRC will still not be interested. 

I just wish I could get my head around why so many believe that there is tax payable on gifts within the U.K. 

Jeremy535897

Granddad can give away £250 per person per year, and can give £3,000 a year as well, and can make regular gifts out of surplus income, without there ever being any inheritance tax implications. On top of that, unless granddad's estate is at least £325,000 (up to £500,000 if it includes a house, up to £1 million between a married couple), there cannot be any inheritance tax on his estate. The only time a lifetime gift can attract inheritance tax is if it is not exempted (£250 a person, £3,000 a year etc), it is made within seven years of death, and the cumulative gifts in the 7 years before death exceed the nil rate band (somewhere between £325,000 and £1 million).

Jeremy535897

[Deleted User] said:

kuratowski said:

If we're talking about the small gifts exemption for inheritance tax (IHT), it's £250 per person, per year.  The only time gifts are of interest to HMRC is when somebody dies within 7 years of making them.

If your granddad is trying to plan for IHT, he would do well to consult a professional.

Important to note that if the estate is not sufficiently large to attract inheritance tax, HMRC will still not be interested. 

I just wish I could get my head around why so many believe that there is tax payable on gifts within the U.K. 

Yes, it isn't rational, because those that worry about it focus on cash gifts, whereas taking your adult son and his family for a meal out with you is just as much a gift as cash is.

Sea_Shell

Jeremy535897 said:

[Deleted User] said:

kuratowski said:

If we're talking about the small gifts exemption for inheritance tax (IHT), it's £250 per person, per year.  The only time gifts are of interest to HMRC is when somebody dies within 7 years of making them.

If your granddad is trying to plan for IHT, he would do well to consult a professional.

Important to note that if the estate is not sufficiently large to attract inheritance tax, HMRC will still not be interested. 

I just wish I could get my head around why so many believe that there is tax payable on gifts within the U.K. 

Yes, it isn't rational, because those that worry about it focus on cash gifts, whereas taking your adult son and his family for a meal out with you is just as much a gift as cash is.

When you start to think laterally, there are many ways to "gift" without "gifting".


Eg.  How long does a "personal possession" need to be in your possession before you can just "donate" it? 😉

Albermarle

[Deleted User] said:

kuratowski said:

If we're talking about the small gifts exemption for inheritance tax (IHT), it's £250 per person, per year.  The only time gifts are of interest to HMRC is when somebody dies within 7 years of making them.

If your granddad is trying to plan for IHT, he would do well to consult a professional.

Important to note that if the estate is not sufficiently large to attract inheritance tax, HMRC will still not be interested. 

I just wish I could get my head around why so many believe that there is tax payable on gifts within the U.K. 

My belief is that it comes from many newspaper articles ( typically in the DT , DE and DM) about IHT, that are primarily written in a way to grab peoples attention and/or make a political point ( usually against the DEATH TAX ) , and therefore are not written very well or clearly.

Jeremy535897

The DT is running a campaign about it, and there was one example which completely ignored the availability of downsizing relief regarding the residential nil rate band, thus scaring people unnecessarily.

Jeremy535897

Sea_Shell said:

Jeremy535897 said:

[Deleted User] said:

kuratowski said:

If we're talking about the small gifts exemption for inheritance tax (IHT), it's £250 per person, per year.  The only time gifts are of interest to HMRC is when somebody dies within 7 years of making them.

If your granddad is trying to plan for IHT, he would do well to consult a professional.

Important to note that if the estate is not sufficiently large to attract inheritance tax, HMRC will still not be interested. 

I just wish I could get my head around why so many believe that there is tax payable on gifts within the U.K. 

Yes, it isn't rational, because those that worry about it focus on cash gifts, whereas taking your adult son and his family for a meal out with you is just as much a gift as cash is.

When you start to think laterally, there are many ways to "gift" without "gifting".


Eg.  How long does a "personal possession" need to be in your possession before you can just "donate" it? 😉

Yes, the value to be used is market value, so as an example, if you want to give someone money to buy a depreciating asset, perhaps buy the asset and then give it away. I always liked the idea of a high stakes poker game with your son winning £1 million off you, but I guess it would be extremely hard to prove it wasn't set up!