Gifting cash to children - what process?
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simon2018
Posts: 68 Forumite
in Cutting tax
Hello
My uncle was talking about gifting money to his children and nephews.
He sold his business a few years ago and go money sitting in the bank and not want to gamble in shares/etc.
He wants to give 100k approx each to nephews and 250k each to his children.
He does not like paying money out unless he has to and will after he has done his research so he is not overcharged for advice/help
When he gifts the large amounts - does he need a solicitor or can he just draw up a letter stating amount gifted and two signatures from people that are not getting the gift?
If the above is the case, are there any standard letters/etc. He is fully aware and old school, once he has gifted the money, even without signatures, the money is nothing to do with him and those that get the gift could gamble it away, lose it in a divorce or do the right thing, eg buy a property, pay off a mortgage or some of it, pay of their debts, or save up for a deposit/etc/etc.
Many thanks
My uncle was talking about gifting money to his children and nephews.
He sold his business a few years ago and go money sitting in the bank and not want to gamble in shares/etc.
He wants to give 100k approx each to nephews and 250k each to his children.
He does not like paying money out unless he has to and will after he has done his research so he is not overcharged for advice/help
When he gifts the large amounts - does he need a solicitor or can he just draw up a letter stating amount gifted and two signatures from people that are not getting the gift?
If the above is the case, are there any standard letters/etc. He is fully aware and old school, once he has gifted the money, even without signatures, the money is nothing to do with him and those that get the gift could gamble it away, lose it in a divorce or do the right thing, eg buy a property, pay off a mortgage or some of it, pay of their debts, or save up for a deposit/etc/etc.
Many thanks
0
Comments
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The money will still have something to do with him, as it will stay in his estate for 7 years for IHT purposes, although the amount given over his nil rate band will be subject to taper relief over those 7 years.
With the amount involved he should take paid for advice from an IFA about the most tax efficient way of gifting, and to make sure he still has plenty of assets left over to see that he is comfortable in old age, and have a sufficiently large reserve left to pay for high quality care should he need it, and that his estate has enough assets to meet any IHT due without the need for it to be clawed back for the recipients of those gifts should he die within 7 years.0 -
Thank you. but does he need a solicitor?
Re IFA - do any banks or building societies provide advice for free initially?0 -
No he does not need a solisitor, and banks / building societies are not independent so should be avoided.
I am sure when he was in busness he paid accounts and other professionals, so why the reluctance now when so much is at stake?0 -
Your uncle is not compelled to take advice about giving away his money.
He may, however, wish to be fully conversant with the Inheritance Tax implications and also with with the question of "deprivation of assets" in the event that he required means tested care.
https://www.which.co.uk/money/tax/inheritance-tax/guides/inheritance-tax-planning-and-tax-free-gifts
https://www.which.co.uk/elderly-care/financing-care/gifting-assets-and-property/343063-what-are-the-rules-for-gifting-assets
https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band0 -
[FONT=Verdana, sans-serif]Given the amounts involved the beneficiaries of the gifts may be liable to IHT if he dies within 7 years so maybe they should be advised about that just in case.[/FONT]
[FONT=Verdana, sans-serif]For the same reason it would be a good idea to make all gifts at the same time or at least in the same tax year otherwise the last to receive their gift might end up paying all the tax.[/FONT]0 -
He wants to give 100k approx each to nephews and 250k each to his children.
Only Nephews?? Aren't your sisters getting any money from your uncle then? Doesn't seem fair!!
With all this money coming your your way from your dad as well as your uncle, you can give your boss the old boot
Before doing something... do nothing0 -
Fantasist.
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