Capital Purchases from Savings and IHT403

benin

I am considering giving gifts to my children out of surplus income to avoid these gifts being liable for IHT under the seven year rule. I will still have savings and I will use these to make significant capital purchases. Two I made this year are a new car and having the house repointed.

My questions are

1 With the car would I have to account for the total cost within the year it was purchased or could I depreciate the cost over 10 years. Alternatively because it was purchased from savings could I ignore it completely when completing the Travel section of IHT 403?

2 Same question for the repointing – account totally within the year of purchase, depreciate over twenty years or ignore as it is purchased from savings?

Thanks in advance

poseidon1

The presumption in both examples is that you are spending from capital savings rather than from disposal income, unless of course your income is a very high 6 figure number and these costs a mere drop in the ocean in the year concerned.

If your annual income cannot absorbed these costs then they are not IHT403 items.

By way the IHT gifts out of surplus income exemption ( or any other exemption for that matter) does not in any way recognise the concept of amortisation or depreciation of personal capital expenditure.

benin

Thanks poseidon1