A married couple gifting a child tax free limit £3000 or £6000

olly50

As specified in the title, can I leave £3000 to our child tax free and can my wife leave £3000 to our child tax free i.e. can the total be £6000 tax free

Keep_pedalling

What do you mean by leave? 

You can both gift £3000 each year (or £6000 jointly) which will be exempt from IHT if you die within 7 years. This however is not a limit, you can gift as much as you like but if you die within 7 years non exempt gifts are brought back into your estate for IHT purposes. None of this is of importance unless your estates are in IHT territory, which  as a married couple could be as high as £1M. 

Dazed_and_C0nfused

olly50 said:

As specified in the title, can I leave £3000 to our child tax free and can my wife leave £3000 to our child tax free i.e. can the total be £6000 tax free

There is no tax on gifts.

https://www.litrg.org.uk/tax-nic/income-tax/working-out-what-taxable/gifts-and-loans#3

olly50

I meant gift not leave. Thanks for your post, we  will gift £12,000 to our son. We did not leave anything to him in the last tax year, so it should be £6000 for last year and £6000 for this year, both tax free.

NorthYorkie

If you are talking about Inheritance Tax, both you and your wife have an annual exemption of £3,000 each in a tax year and if neither of you used that exemption last tax year, then it can be brought forward and used this year. So, in those circumstances your combined total could be £12,000.

N.B. the 7-year rule mentioned above is not relevant to this exemption.

QrizB

olly50 said:

I meant gift not leave. Thanks for your post, we  will gift £12,000 to our son.

As stated above, there is no tax on gifts in the UK. You could gift £1 or £1 million, all tax-free.

olly50 said:

We did not leave anything to him in the last tax year, so it should be £6000 for last year and £6000 for this year, both tax free.

"Leave" typically means "a bequest made on death". If you didn't die last year, you can't have left him anything then. If you don't die this year, you can't leave anything this year either.

Keep_pedalling

olly50 said:

I meant gift not leave. Thanks for your post, we  will gift £12,000 to our son. We did not leave anything to him in the last tax year, so it should be £6000 for last year and £6000 for this year, both tax free.

If you gave him £100k it would still be tax free, unless both of you died within 7 years and had more than £1M in assets (assuming you own a house worth at least £350k).

If your net worth is more than that then you should consider making larger gifts to reduce you IHT liability. 

tetrarch

Keep_pedalling said:

olly50 said:

I meant gift not leave. Thanks for your post, we  will gift £12,000 to our son. We did not leave anything to him in the last tax year, so it should be £6000 for last year and £6000 for this year, both tax free.

If you gave him £100k it would still be tax free, unless both of you died within 7 years and had more than £1M in assets (assuming you own a house worth at least £350k).

If your net worth is more than that then you should consider making larger gifts to reduce you IHT liability. 

The optimum way to transfer an immediate £100,000 (assuming nothing last year) would be:

2025           £12,000 plus a Gift of £52,000 and a formal loan of £36,000)
2026-2031  £6,000 minus a loan repayment of £6,000

No IHT implications apart from the £52K

Regards

Tet