Gifts to family

TwinLizzy

What are the tax rules about giving to family members? How much can we 'give' to our small children - ie putting in their savings? How much can we receive from elderly parents? Does tax have to be paid?

Henwen

Each parent can give up to £3000 per year from income (not savings). You can use last year's allowance up too. No tax is payable on that. I think you can also give more for things like weddings too but not too sure about the amount.

RayWolfe

No, not correct.
There is no tax on gifts. FULL STOP.
There could be inheritance tax issues if the giver dies within seven years of the gift being made.
There are tax implications for the interest on money given by parents to minor non-tax paying children.

firstinflight

1: Receiving a gift does not count as "income" so no income tax to pay.

2: A cash gift does not fall under the capital gains regime. Non-cash gifts such as property or valuables worth over £6000 may be liable to CGT based on the market value of the item.

3: Inheritance tax: No tax at the time of the gift (unless you are putting money into a trust fund), however it will be taxed if you die within 7 years, and crucially, the tax will be payable by the recipient of the gift. But you pay no inheritance tax on:
The first £3000 of disposals in any year (unused allowances can be carried forward 1 year only)
Small gifts totalling £250 per person per year.
The first £300,000 of your estate on death (including disposals made in the 7 years prior to death)

prudentsaving42

firstinflight wrote: »

1: Receiving a gift does not count as "income" so no income tax to pay.

2: A cash gift does not fall under the capital gains regime. Non-cash gifts such as property or valuables worth over £6000 may be liable to CGT based on the market value of the item.

3: Inheritance tax: No tax at the time of the gift (unless you are putting money into a trust fund), however it will be taxed if you die within 7 years, and crucially, the tax will be payable by the recipient of the gift. But you pay no inheritance tax on:
The first £3000 of disposals in any year (unused allowances can be carried forward 1 year only)
Small gifts totalling £250 per person per year.
The first £300,000 of your estate on death (including disposals made in the 7 years prior to death)

No tax is payable on the first £350,000 of estate as far as I can remember.

firstinflight

sorry, yes 300,000 was last year's limit

edwara

I read somewhere, I think on MSE, that children can only earn up to £100 in interest on money given to them by parents before they have to pay tax on it. Another lttle gift from the now PM. I assume it is to stop us all stashing our cash in the kuids name to avoid tax

RayWolfe

This has been in existence for at least the last 30 years.
And yes, it was introduce by the Tories for exactly that reason.
Tell us, do you think it a wrong measure?

firstinflight

Interesting. Does the normal personal allowance not apply in this case?

Cook_County

Correct - it is a settlement from the parent & taxed on the parent.

The child can still use their personal allowance for their paper round, acting work etc...

sloughflint

kenan557 wrote: »

No tax is payable on the first £350,000 of estate as far as I can remember.

No, this is the figure for 10/11
£ 312 000 this year, £325 000 next year.