Gift allowance

loulou41

How much am I allowed to give per year, I understand it is £3000 a year. I have got 2 children, can I give each one £3000 and my husband does the same. This means they get £6000 from each parent. I thought it was £3000 per parent, but I read an article in the daily mail saying that each parent can give each child £3000 each. Pl can somebody clarify this for me!! Thanks

CLAPTON

You can give your children or anyone else for that matter, any amount you like: neither you nor they will be taxed on it.


However, for Inheritance Tax purposes, if you die within 7 years these gifts may be added to your estate and if greater than the then IHT allowance may be taxed. However you can make gifts of up to the total of 3k without this counting for IHT purposes. Similarly if the gifts are made from income and not capital they are exempt.

What age are the children, how old are you?

loulou41

They are adult children in their twenties and I am 59. How many gifts of 3k can I make in a year? Do I have to keep a record if I make the gifts out of income. Thanks

CLAPTON

As I've said you can give any amount to whoever you want any number of times a year.

What exactly is your concern?

If IHT is your concern, why are you expecting to die within 7 years.. are you in poor health?

And remember, if you don't give anything away and die and your estate is over the IHT allowance then the estate pays IHT anyway.

However, if IHT is your concern its best to google IHT and see the results but briefly.
you can give any number of gifts to separate people of 250 per year ... so if you had 40 nieces, nephews, grandchildren etc then you could give each one 250 making 10,000 in total

and you can give up to 3,000 in total so you could give each of your children 1,500 per year

However if the money is out of income and not capital then you can give anything you like without IHT concerns.... It may be better to keep records but there is no requirement to do so.

And remember again... if your estate is above the IHT allowance when you die, then the estate will pay IHT anyway so may as well give it away will you are alive.

pga03

Hi
In your thread about Gift allowance you say the amount you can give your children is £3000 from your income,what if you want to take the money from your capital ie savings,will this be taxed

CLAPTON

There is no gift tax in the UK

However, if gifts are made from capital and you die within 7 years then they are potentially liable to IHT.
Certain exceptions are made including gifts totaling up to 3k per annum and gifts made to different people up to 250 each.
However, if you don't die with 7 years or your total estate is less than the IHT allowance then no tax is payable.

If the gifts are made from your income then they are not potentially liable to IHT.

wendy_raymond

My grandmother is a home with over £100k in the bank when you say she can gift £3,000 in each year. When they are already in a home I guess rules are a lot tighter about what she is allowed to give as gifts.

Some people would think she is lucky to have this money but i will add she is 94 only inherited this money 3 years ago and is not even aware of how much she has, up until this summer she was in good health caring for her self never asking for any help. Since she has had a fall and can no longer look after herself the local authority now take £725 a week to let her stay in a home.

How can anyone justify this. I guess I will go back to my original question how much can she give away without anyone getting into trouble?

RayWolfe

None if she is likely to want council help later. If she is 94 and has £100K, then it is not likely, but you can't be sure.
What a good thing she inherited when she did, it must be a great comfort to her that she can get excellent care in her last few years.