What is meant by "gifts out of income" and "normal expenditure" in the IHT context?

Jeremy535897

Jewellery is an asset like anything else. Transfers between husband and wife are exempt, so if you leave everything to each other on the first death, there is no IHT.

joesoap1264

What forms are required for IHT and this part of it, so I can get them, familiarise myself, and the kids.

Jeremy535897

Look at page 8 of the attached:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/917890/IHT403-05-20.pdf

joesoap1264

Jeremy535897 said:

Look at page 8 of the attached:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/917890/IHT403-05-20.pdf

So I need to get IH403 for the entire IHT for Hmrc, does this include the gift part you just gave?

Jeremy535897

Just download it, or keep a spreadsheet that gives the same data.

joesoap1264

Cheers J, much appreciated.👍👍

MarzipanCrumble

Jeremy535897 said:

Just download it, or keep a spreadsheet that gives the same data.

I pointed this out much earlier in the thread.  Keep it annually and suggest you print it out so easily available by executors.

Linton

You should not need to get into complex details.  The rules are vague. Just keep full records of gifts and annual total income/expenditure.  Dont try to be clever in seeing what you can get away with, just be reasonable.   HMRC are not interested in checking gift by gift, unless perhaps they suspect something is seriously wrong.  Definitive rules will only come about through court rulings and I doubt you want your estate to become a famous test case.

Yes you can change your regular gifts over time. I suggest you dont do it frequently with large short term variations  One of the few court cases there have been was when the deceased made a note of all her unused income at the end of the tax year and paid it all out to particular family members   HMRC objected but the judge ruled that this met the requirements for Gifts from Income.

joesoap1264

Thanks all.
much appreciated.
I have always kept gifts from 2014.date,amount, to whom.
been making regular birthday and Xmas gifts to kids for three years now.
£10k birthdays,  £1k-£2k at xmas.
have give odd amounts,now and then, but will stop this and stick to regular amounts  only, increased or decreased depending on income.
put money into GG jisa irregular, last 6years, from birth,but have  up SO for £100pm.
does the income always have to stay in our current a/c where it’s paid into, and all bills, outgoings from,or can it be moved to linked savings a/c for interest , and back again ? Hsbc pays zero on current a/c, saga linked is 4%, which is why we move it, to and fro.?
if too much in saga, fix it with other banks.
It mounts up quick at £4k every 4 weeks income, and less than £1000 outgoings, unless a big  item spend is required occasionally,very occasionally!

Jeremy535897

I don't think there is any issue with moving temporarily surplus funds to a linked savings account.