Making cash gifts to children who are married

UnsureAboutthis

Good morning.

Just asking to share knowledge with my family, ie siblings etc, when we meet soon

If you gave cash gifts to your children (FYI, I'm aware of 'tax-free gift allowances' IHT and deprivation of assets) who are married, then your married son/daughter almost immediately transfers the gift to their husband and wife, would there be any tax implications to your child you gifted money to?   Assuming you child is a higher rate taxpayer and their OH is either a non-taxpayer, i.e., not working/or a standard taxpayer. (No one is on benefits etc)

The aim of the above question is to reduce the tax, saving interest tax burden on the child you gift the money to via lawful routes.

FYI, I'm aware of the implications of divorces/etc/e/tc/etc.

Thanks, as always.

DavidT67

No, The UK doesn't tax gifts between spouses. 

Married couples are free to distribute money between themselves in the most tax efficient way possible.

RAS

Why not gift money directly to the spouse?

UnsureAboutthis

DavidT67 said:

No, The UK doesn't tax gifts between spouses. 

Married couples are free to distribute money between themselves in the most tax efficient way possible.

As I thought, but your post is helpful, so thank you for confirming.

NedS

It depends on the amount gifted.

If a gift is given within 7 years of death, and over £325,000 has been gifted, then the person who received the gift (not the estate) will be liable to pay inheritance tax on it. 

There are examples here:

https://www.royallondon.com/guides-tools/planning-ahead/estate-planning/gifting-money-and-inheritance-tax/

Obviously only applies where a large amount of gifting has occurred.

MyRealNameToo

There is no tax on gifts other than from an employer to an employee which will generally be considered income other than a few exceptions. 

IHT doesnt make a tax on the gift but for estate valuation unwinds the gift so it may fully or partially still be considered part of the estate. Generally the estate itself pays for the IHT rather than the gift receiver unless the estate is insolvent. Hadn't previously heard of the £325k gift rule but not saying it's not true. 

Spouses are free to divide their savings as they see fit and can do so in more tax efficient ways when considering interest. Obviously if things breakdown between the spouses accessing the savings being held solely by the lower tax payer may be difficult.