Giving money to siblings without tax implications

XzavierWalnut

Apologies if this has already been answered but I cannot find a definitive answer on here or online.
Am I allowed to give my siblings more than £3000 between them each financial year without IHT complications?
I am 60 years old so hopefully will last at least another 7 years, married ,and our estate is worth more than £1m.

relaxtwotribes

Only with one of two provisos applying.  One, that you survive for 7 years. Or two, that you gift the surplus above £3k out of surplus income and as one of a regular series of gifts.
You have a £3k annual gifting allowance, as does your wife, making a total of £6k (subject to her not gifting elsewhere).

sammyjammy

How Inheritance Tax works: thresholds, rules and allowances: Rules on giving gifts - GOV.UK (www.gov.uk)

Brie

@sammyjammy
While I quite get the bit that an individual can only gift a total of £3k each year (split between however many people) what I don't understand is the bit in your link that states:

Small gift allowance

You can give as many gifts of up to £250 per person as you want each tax year, as long as you have not used another allowance on the same person.

Birthday or Christmas gifts you give from your regular income are exempt from Inheritance Tax.

Does that mean that you could given each of 10 individuals £250 a week every week for a year or just give 10 individuals £250 each in each tax year?

And would it be better for the OP to give each sibling say £30k now and maybe nothing else working on the assumption that they'll last til they're at least 67 and no IHT would be incurred?  Maybe put something in the will about given them each a sum sufficient to pay any IHT should they fall off their perch much sooner???

[Deleted User]

Hi,

IHT is payable by the estate not by those who have been gifted money.

XzavierWalnut

relaxtwotribes said:

Only with one of two provisos applying.  One, that you survive for 7 years. Or two, that you gift the surplus above £3k out of surplus income and as one of a regular series of gifts.
You have a £3k annual gifting allowance, as does your wife, making a total of £6k (subject to her not gifting elsewhere).

Thank you for the info. I don't understand "above £3k out of surplus income"
for clarification the total sum is just under £30k. I don't really have any income as I retired @ 59 and living off investments and excess cash.

Savvy_Sue

wonderful as that might be for your siblings, have you given thought to your / your spouse's possible needs should either of you suffer serious illness, disability or catastrophic accident? 

At 60, you both may well be hale and hearty, but without wishing to be a doom-monger, I would want to ensure that should you need a high level of assistance in the future that you'd be able to organise it and pay for it yourself, rather than relying on whatever the local authority will offer. Also they WILL (almost certainly) make a financial assessment and what you have so generously given away may be deemed 'deprivation of assets'. 

Are your siblings in particular need? 

XzavierWalnut

Savvy_Sue said:

wonderful as that might be for your siblings, have you given thought to your / your spouse's possible needs should either of you suffer serious illness, disability or catastrophic accident? 

At 60, you both may well be hale and hearty, but without wishing to be a doom-monger, I would want to ensure that should you need a high level of assistance in the future that you'd be able to organise it and pay for it yourself, rather than relying on whatever the local authority will offer. Also they WILL (almost certainly) make a financial assessment and what you have so generously given away may be deemed 'deprivation of assets'. 

Are your siblings in particular need? 

Yes we have thought about what you said. We are in a fortunate position where £30k is not a huge sum to us, despite what happens.

relaxtwotribes

XzavierWalnut said:. I don't understand "above £3k out of surplus income"

for clarification the total sum is just under £30k. I don't really have any income as I retired @ 59 and living off investments and excess cash.

In which case you don’t need to concern yourself.

user1977

I think people tend to get confused about this - nobody is going to incur extra tax by you gifting too much money during your lifetime. After all, if you keep the money until you die, then it will definitely be part of your estate for IHT purposes! If you gift "too much" money it just means it might be treated as part of the IHT calculation if you die within the relevant period.

Marcon

XzavierWalnut said:

Apologies if this has already been answered but I cannot find a definitive answer on here or online.
Am I allowed to give my siblings more than £3000 between them each financial year without IHT complications?
I am 60 years old so hopefully will last at least another 7 years, married ,and our estate is worth more than £1m.

It's not really that complicated, but you do need to keep records of how much you give them to help your executors should you die before 7 years has elapsed.