Re: Gifts to children


"jal" <lalaw44@xxxxxxxxxxx> wrote in message
news:lalaw44-1001EF.14182130042007@xxxxxxxxxxxxxxxxxxxxx
Hi - Sorry: probably an old chestnut but I was unable to find anything
useful by Googling this group ...

Now that I'm an old git [according to my kids], I would like - some
time in the next few years - to give my kids a few thousands pounds each
(while it's still worth a few thousand pounds).

In particular I'd like to do this now-ish, since I seem to remember an
acquaintance telling me "you can give them what you like ... as long as
you don't die within 7 years".

Any opinions?

jal

As you say you can give any amount away as long as you survive for a full 7
years, otherwise the amount gets drawn back as if it were still yours and is
added to your estate to see if IHT is payable (above £300k presently). This
is known as a potentially exempt transfer/gift because it has the potential
to become exempt after 7 years.

However there is an exempt gift you can give up to £3000 in any tax year. So
if you have 2 children you can give £1500 each. If one or both of your
children has married in that tax year you can give him/her £5000 as an
exempt gift. You can also give above and beyond the above by giving £250 in
small gifts (called the small gifts allowance) but this must be to anyone
else and not added to an existing childs gift.

There is also another way of gifting...you can gift "out of income" as long
as it doesnt leave you short, however you must keep meticulous records of
your spend and income to prove to the capital taxes office to their
satisfaction that it is truely "out of income" and not capital disposal.


.

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