Question on gifts

Boleyn19

After meeting with our financial advisors I am preparing an executors' file for our sons (ages 25 and 21) to help them when the first of us dies and then the second. This means I have to understand what is needed for probate in both instances. As it stands at the moment the estate on 2nd death will be liable for IHT.

Basic question on gifts (I'm setting up a spreadsheet) - do you need to put these on the form if they are exempt? For instance we have set up a pension for younger son and I paid in £2880 today. This falls within my annual exemption. Would that need to be entered?

Very basic questions on gifts regarding family holidays. We always have gone on family holidays, often more than one, but now only one family one. The elder is earning silly money so he pays his share. The younger is earning minimum wage so he doesn't contribute.

1. When the lads were at school, 6th form or university would us paying for them ever be classed as gifts? These holidays were always been paid from salaried income.

2. Now they are adults (and out of education) and we are retired we have paid for them to come away for one or two weeks. As we have this pattern for 25 years could it be classed as regular payments out of income (pensions and rental income) or would we have to use the £3k pp allowance? We don't dip into savings to pay for the holidays.

Thanks in advance

Keep_pedalling

Boleyn19 said:

After meeting with our financial advisors I am preparing an executors' file for our sons (ages 25 and 21) to help them when the first of us dies and then the second. This means I have to understand what is needed for probate in both instances. As it stands at the moment the estate on 2nd death will be liable for IHT.

Basic question on gifts (I'm setting up a spreadsheet) - do you need to put these on the form if they are exempt? For instance we have set up a pension for younger son and I paid in £2880 today. This falls within my annual exemption. Would that need to be entered?

Not if you have not made previous gifts exceeding £120. To give our executors the complete picture I have also recorded our exempt gifts in our spreadsheet.

Very basic questions on gifts regarding family holidays. We always have gone on family holidays, often more than one, but now only one family one. The elder is earning silly money so he pays his share. The younger is earning minimum wage so he doesn't contribute.

1. When the lads were at school, 6th form or university would us paying for them ever be classed as gifts? These holidays were always been paid from salaried income.

2. Now they are adults (and out of education) and we are retired we have paid for them to come away for one or two weeks. As we have this pattern for 25 years could it be classed as regular payments out of income (pensions and rental income) or would we have to use the £3k pp allowance? We don't dip into savings to pay for the holidays.

Thanks in advance

The holiday thing is tricky. We often rent a holiday cottage or villa with a spare bedroom or three, and invite the children, grand children and sometimes friends to join us, but I have not included that as a gift. We don’t pay for anything other than the accommodation and although it has never happened we risk being in a 3/4 bed property on our own.

I suppose that is technically a gift but no one is ever going to challenge it.

I don’t see any difference in paying for a family holiday when children are in further education than when they are in junior or secondary education. 

bobster2

If you're booking a rental property for a family holiday - or paying for a big meal out - your bank statements will just show a holiday or a meal. I can't imagine a situation where HMRC would be expecting to see receipts showing number of bedrooms, number of main courses etc and records of who was there!!

The reverse situation is actually more likely to need documentation - e.g. your kids book and pay for a family holiday. Then you want to give them some money to reimburse them for your accommodation / meals etc. Then your banks statements just show you sending a chunk of money to your kids. So this would be something worth keeping records on to show it wasn't a gift.