IHT403 Form Gifts from Excess Income

Ebkent

. Level of detail for household Bills
I have been giving my son the same amount of money every year for the past 5 years as a Gift from Excess income.  I keep a spreadsheet with a column for each year and it replicates the layout of the IHT403 form.

For Household bills I have a linked worksheet that I enter the regular individual bills, like Council tax, utilities etc.  I assume this section should include grocery bills ? Can I just estimate this amount , or do I need to add up every supermarket bill ? Any advice on the detail would be appreciated. Particularly if anyone has had any feedback from HMRC after submitting this form

Flugelhorn

I would be interested to know how much detail is needed  as I just give the offspring money regularly, live a normal life   and at the end of the year tot up how much we have in bank / savings and note that each year there has been an increase (over and above the interest) despite the gifts

tacpot12

You can estimate this amount. Just make sure its reasonable. . 

Keep_pedalling

Is this the only gifting you do? Gifts from excess income are useful for stopping you estate growing but doesn’t  actually reduce you liability. Does your spouse use their allowances as well?

Ebkent

I take your point that giving a gift from excess income doesn’t reduce my IHT estate, but if I didn’t do this, I think my estate would be even bigger ! It is currently £2m +, including a house worth £1.3m
My spouse has less annual income so does not gift excess income. I use half the joint expenses to offset my personal income (pensions). We both give £3,000 Pa. And £250 gifts to other relatives

i am now seriously thinking of giving away substantial amounts and hoping either of us live at least 7 years, we are 72 and 78. .  My son is 38, not married yet but is thinking about it, and I need to delicately discuss the subject of him setting up a prenup, to potentially protect the inherited monies, current and future. 

Keep_pedalling

Ebkent said:

I take your point that giving a gift from excess income doesn’t reduce my IHT estate, but if I didn’t do this, I think my estate would be even bigger ! It is currently £2m +, including a house worth £1.3m
My spouse has less annual income so does not gift excess income. I use half the joint expenses to offset my personal income (pensions). We both give £3,000 Pa. And £250 gifts to other relatives

i am now seriously thinking of giving away substantial amounts and hoping either of us live at least 7 years, we are 72 and 78. .  My son is 38, not married yet but is thinking about it, and I need to delicately discuss the subject of him setting up a prenup, to potentially protect the inherited monies, current and future. 

Yes that is exactly the point I was trying to make that you need to look beyond doing the bare minimum, especially with an estate this large. The sooner you both make substancial gifts the better chance you have of surviving the 7 years for it to drop out of your estate. 

Is your son does make firm wedding plans, you can both give an additional £5k exempt gift.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm14191

Runner_Duck

Flugelhorn said:

I would be interested to know how much detail is needed  as I just give the offspring money regularly, live a normal life   and at the end of the year tot up how much we have in bank / savings and note that each year there has been an increase (over and above the interest) despite the gifts

A lot of detail is required for IHT 403, suggest you download that form and start tracking the information that is requested. I only needed to go back 3 years and that took long enough.

BikingBud

Keep_pedalling said:

Ebkent said:

I take your point that giving a gift from excess income doesn’t reduce my IHT estate, but if I didn’t do this, I think my estate would be even bigger ! It is currently £2m +, including a house worth £1.3m
My spouse has less annual income so does not gift excess income. I use half the joint expenses to offset my personal income (pensions). We both give £3,000 Pa. And £250 gifts to other relatives

i am now seriously thinking of giving away substantial amounts and hoping either of us live at least 7 years, we are 72 and 78. .  My son is 38, not married yet but is thinking about it, and I need to delicately discuss the subject of him setting up a prenup, to potentially protect the inherited monies, current and future. 

Yes that is exactly the point I was trying to make that you need to look beyond doing the bare minimum, especially with an estate this large. The sooner you both make substancial gifts the better chance you have of surviving the 7 years for it to drop out of your estate. 

Is your son does make firm wedding plans, you can both give an additional £5k exempt gift.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm14191

Can you legtimately cover the cost of the wedding?