Gifting tax free Annual Exemption.

shakermaker94

I have two nieces and would like to gift them each £3000. As the tax free Annual Exemption is £3000 and I never used last year's Annual Exemption of £3000, can I gift them each £3000 without any tax implications this tax year 2024/25.

DullGreyGuy

There is only a tax implication if you die within 7 years and your estate is big enough to become liable for IHT... its a sliding scale so at 6 years only 8% of the gifts above the annual allowance are considered part of the estate for IHT. 

Are you realistically going to be dying in the next 7 years? 

But yes, you can carry one year forward so as long as you gave no gifts at all last year then the £6k would be ignored for IHT were you to dye the next day and your estate is large enough to trigger IHT

Rodders53

DullGreyGuy said:its a sliding scale so at 6 years only 8% of the gifts above the annual allowance are considered part of the estate for IHT. 

Are you referring to taper relief or something else?? Taper relief is rarely applicable for most ... 

OP:  https://www.gov.uk/inheritance-tax/gifts has the IHT Gift Rules from the horse's mouth.  
There is no tax implications on Gifting generally. 
Wise to keep a record of gifts made for when the day of reckoning (for IHT liability) comes for your Executor (you have made a Will, I trust).

shakermaker94

DullGreyGuy said:

There is only a tax implication if you die within 7 years and your estate is big enough to become liable for IHT... its a sliding scale so at 6 years only 8% of the gifts above the annual allowance are considered part of the estate for IHT. 

Are you realistically going to be dying in the next 7 years? 

But yes, you can carry one year forward so as long as you gave no gifts at all last year then the £6k would be ignored for IHT were you to dye the next day and your estate is large enough to trigger IHT

So if I decided to give them £5000 each (£10000 total) the additional £4000 would be taxable for IHT.

p00hsticks

shakermaker94 said:

DullGreyGuy said:

There is only a tax implication if you die within 7 years and your estate is big enough to become liable for IHT... its a sliding scale so at 6 years only 8% of the gifts above the annual allowance are considered part of the estate for IHT. 

Are you realistically going to be dying in the next 7 years? 

But yes, you can carry one year forward so as long as you gave no gifts at all last year then the £6k would be ignored for IHT were you to dye the next day and your estate is large enough to trigger IHT

So if I decided to give them £5000 each (£10000 total) the additional £4000 would be taxable for IHT.

Only if you died within seven years and your estate was liable for IHT when including the additional gifts....

Keep_pedalling

If your estate actually falls within IHT territory then any non exempt gifts made within 7 years will be taken into account but it will be your residuary estate that pays the tax not the people receiving the gifts (unless you have given so Mach away there is not enough left to pay the tax) 

To help your executor you should keep records of gifts made.

Taper relief does not apply unless your gifting exceeds your NRB (£325k)