Married couple gifting to children

thingswerentthisbadinmyday

I’d like to try and understand the technical/legal position with regard to the following transaction.

Married couple. One party (say the wife, but doesn’t matter which way round) asks husband to make cheque/BACS payment from his sole account) to child/grandchild as a gift (from wife). Which he does.

Wife then refunds the husband amount of said gift from her sole account to his sole account.

For purposes of IHT/gifting, can the gift be regarded as being made by the wife even though the payment emanated from the husbands account?

Thanks

Keep_pedalling

Why not keep it simple and either gift from a joint account or make two seperate payments. Money coming from a sole account will not be considered as a joint gift by HMRC.

if one spouse does not have the assets and they don’t have a joint account the other spouse can transfer half the gift to their spouse who can then make their gift from that money.

thingswerentthisbadinmyday

https://forums.moneysavingexpert.com/discussion/comment/81969443#Comment_81969443

Ideally, yes. Agree 100%.

However, this is something that’s already happened (more than once) and because I’m keeping a rolling 7-year spreadsheet of gifts (in the knowledge that I’ll need the info at some point in the future), I’m keen to know how those past payments would be regarded by HMRC for IHT purposes.

From your comments, it looks likely that - for IHT - HMRC would regard the gift as coming from the sole account holder, irrespective of arrangements made between the husband and wife.

Thanks

Ms_Chocaholic

How old-ish are you and how much are you gifting (approx)

Keep_pedalling

The gifts already made are counted as gifts from the account holder. Even if the husband dies within 7 years of making them, unless the total gifts in the last 7 years exceed £325k then providing his wife inherits all of his estate then no IHT would be payable on his death it would just reduce the amount of transferable NRB that can be transferred to her estate.

If the amounts are significant and he is in good health then one option is to take out tern life insurence to cover any IHT due if he met an unfortunate early demise. If on the other hand the joint net worth (plus gifts) is under £1M and they own their home (£650k if they rent) then none of this is worth worrying about.

thingswerentthisbadinmyday

https://forums.moneysavingexpert.com/discussion/comment/81970085#Comment_81970085

Thank you for the helpful advice.

It’s not so much that I’m worried about the situation (because the gifts have been modest).

It’s more a case of me wanting to understand who has actually made the gift when it comes to reporting on the IHT 403.

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/81970102#Comment_81970102

You will not need to report this on the first death if the surviving spouse inherits the bulk of the estate as no IHT return will be required.