Gift and IHT

2010

If you gift someone, say £20k, from a joint bank account, for IHT purposes, is it classed as £10k each?

Keep_pedalling

If we are talking about a joint account held by a couple then yes it is a joint gift. If it is an account for convenience, say between a parent and a child, with only the parent funding the account then no it would be a gift solely from the parent.

LukeB_92

One practical consequence of that split, which is worth keeping in mind when you record it, is that the two halves are treated as separate gifts by separate people.

So on a genuinely jointly-funded account, a £20,000 gift is £10,000 from each holder — and each holder has their own £3,000 annual exemption to set against their half (plus any unused exemption carried forward from the previous tax year), with the balance of each half being a potentially exempt transfer for that person. The seven-year clock therefore runs separately for each half, on each donor's own history of earlier gifts.

That is why a brief note kept with the gift — date, amount, that it came from the joint account, and how that account is funded — is useful. If the account is mainly topped up by one of you, that funding point is what decides whether it really is £10,000 each, rather than £20,000 from one person using a joint account.

2010

Thanks, it's a couple who's individual monthly incomes both go into the joint account.

I knew about the £3k gift allowance each per tax year but not about being able to carry any unused from the previous year.

I'm assuming it's only the previous year unused allowance that this applies to.

silvercar

https://forums.moneysavingexpert.com/discussion/comment/82168666#Comment_82168666

Yes, you only bring forward one unused year’s allowance (each for a joint account).