Annual Tax free Gift Allowance for 2 parents

lionheart79

Hi all
Can one parent gift on behalf of the other in relation to annual tax free limits?

Each person has a £3000 annual allowance (ignoring the £250 small gifts)
For 2 parents, this would be £6000.

But if one spouse is the "dominant partner" when it comes to financial affairs, is it ok for all gifts to come from their account - i.e. they make payments up to the full £6000, rather than the money explicitly originating in a 3k/3k split from separate named accounts?

I would assume this is ok for married couples since monetary transfers between spouses are not subject to any restrictions but wanted to double check.

Thanks

DRS1

Might be OK if you did it from a joint account (although that can be messy).

Keep_pedalling

No problem doing that provided you are married or civil partners. 

All our gifting comes from our joint account.

Bookworm225

your implication is the 6K comes from an account in a sole name?
technically it should be from a joint account but you'll probably get away with it.

Keep_pedalling

Bookworm225 said:

your implication is the 6K comes from an account in a sole name?
technically it should be from a joint account but you'll probably get away with it.

Or gift send half the gift to an account held by the spouse first. 

Bookworm225

Keep_pedalling said:

Bookworm225 said:

your implication is the 6K comes from an account in a sole name?
technically it should be from a joint account but you'll probably get away with it.

Or gift send half the gift to an account held by the spouse first. 

either way is better than what Op seems to be asking, can a payment from a sole name account be classed as from 2 people because one of them is the one wearing the trousers in the relationship and that's what they say it is

Albermarle

Can one parent gift on behalf of the other in relation to annual tax free limits?
Each person has a £3000 annual allowance

We see a lot of misunderstandings on the forums about this rule, so just in case you are not aware.
There is no tax on gifts in the UK. You can give as much as you like to who you like.

The only point to note is that gifts larger than £3Kpa will be counted back into you estate for inheritance tax calculation purposes. But you will never pay more tax than if you had not made the gift in the first place. 
Plus of course it only affects people who have enough assets to be potentially liable for IHT anyway.

Bookworm225

Albermarle said:

Can one parent gift on behalf of the other in relation to annual tax free limits?
Each person has a £3000 annual allowance

We see a lot of misunderstandings on the forums about this rule, so just in case you are not aware.
There is no tax on gifts in the UK. You can give as much as you like to who you like.

The only point to note is that gifts larger than £3Kpa will be counted back into you estate for inheritance tax calculation purposes. But you will never pay more tax than if you had not made the gift in the first place. 
Plus of course it only affects people who have enough assets to be potentially liable for IHT anyway.

@Albermarle how does that answer the question? 
OP's question is clear: can a lump sum be split between 2 people for tax purposes when it comes from an account in a sole name.

possibly yes if there is an audit trail showing transfer from A to B and then "combined" lump sum paid by B
yes, if from joint account
no, if sole name account from pre-existing balance.

Keep_pedalling

I did not read the opening post correctly so I take back my original comment. 

I hope they do actually have a joint account or the other spouse has their own account, otherwise this is going to cause big problems if the ‘dominant’ spouse dies. 

silvercar

Keep_pedalling said:

I did not read the opening post correctly so I take back my original comment. 

I hope they do actually have a joint account or the other spouse has their own account, otherwise this is going to cause big problems if the ‘dominant’ spouse dies. 

If the dominant spouse is leaving nearly everything to their spouse, then provided the gift is under £325k it will be under the IHT tax threshold.

Keep_pedalling

silvercar said:

Keep_pedalling said:

I did not read the opening post correctly so I take back my original comment. 

I hope they do actually have a joint account or the other spouse has their own account, otherwise this is going to cause big problems if the ‘dominant’ spouse dies. 

If the dominant spouse is leaving nearly everything to their spouse, then provided the gift is under £325k it will be under the IHT tax threshold.

I was thinking about how someone will cope with no bank account after their spouse has died, or loses mental capacity, rather than IHT.