Giving child lump sum and iht

Linton

fuzzzzy said:

400ixl said:

As above, a regular gift from income has to be exactly that. A clear transfer of funds from disposable income given as the income comes in.

I agree it is more obviously a gift from income if done that way, but I don't see what is wrong with setting up a regular pattern of giving one larger gift at xmas, or the end of the tax year say, as long as you can show that all your outgoings and the gift are covered by your yearly income.

Yes you can do that.  As far as I know there has only been 1 court case that has provided any clarification on what the requirements for Gifts from Income really mean.  In that case a person concerned kept detailed records of her income and expenditure and simply gifted any excess income to her grandchildren at the end of the tax year.  HMRC objected since the amounts were not regular..  The judge ruled that the requirements were in fact being met. 

The important thing is not to try to be too clever.  It complicates things for the executor and may not work.  You dont want to be the next case that comes up before the courts.