Law1 min ago
Hmrc Tax Free Gifts - In Addition To The £3000 Limit
HMRC: What counts as a gift? - Small cash gifts.
'You can also give away small tax free gifts of up to £250 to as many people as you like during the tax year.
Is this slightly ambiguous?
Does it mean that you cannot give more than £250 in any tax year to the same person? Or that [within reason] no one gift may exceed £250?
'You can also give away small tax free gifts of up to £250 to as many people as you like during the tax year.
Is this slightly ambiguous?
Does it mean that you cannot give more than £250 in any tax year to the same person? Or that [within reason] no one gift may exceed £250?
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For more on marking an answer as the "Best Answer", please visit our FAQ.Err- you can give away any amount- thousands, millions, billions- without your or the recipient paying tax. if you are talking about inheritance tax then you don't pay it- your estate does. But it's easy to get round it- eg if you can show the gifts don't affect your standard of living. Get 30 mins with a tax solicitor
Thanks for all your advice. Having fulfilled a wish to give up driving due to old age *before* having an accident, I've sold my car and want to give the money to family. A maximum of £250 per person per annum is the way to go.
fiction-factory. The ISA wrapper matter is still being sorted out by my FA but at least the fundholder, without equivocation, admitted their advice was wrong. For that, I was astonished to learn I may be in line for compensation! However, at the moment, the move into cash has been very beneficial and far outweighs any money likely to be on offer.
This is 'third time lucky' as twice before over the years I've moved into cash - and been wrong.
fiction-factory. The ISA wrapper matter is still being sorted out by my FA but at least the fundholder, without equivocation, admitted their advice was wrong. For that, I was astonished to learn I may be in line for compensation! However, at the moment, the move into cash has been very beneficial and far outweighs any money likely to be on offer.
This is 'third time lucky' as twice before over the years I've moved into cash - and been wrong.
From the Government's Money Advice Service
"What else can I give tax-free?
Gifts that are worth less than £250
You can give as many gifts of up to £250 to as many individuals as you want. Although not to anyone who has already received a gift of your whole £3,000 annual exemption. None of these gifts are subject to Inheritance Tax."
I read that to mean you can give a total of £3,000 each tax year as gifts shared between as many folk as you want but each gift must not be more than £250.
That means one person could receive twelve gifts of £250 or six folk could receive two gifts of £250.
"What else can I give tax-free?
Gifts that are worth less than £250
You can give as many gifts of up to £250 to as many individuals as you want. Although not to anyone who has already received a gift of your whole £3,000 annual exemption. None of these gifts are subject to Inheritance Tax."
I read that to mean you can give a total of £3,000 each tax year as gifts shared between as many folk as you want but each gift must not be more than £250.
That means one person could receive twelve gifts of £250 or six folk could receive two gifts of £250.
Yes, I agree with The Corbeyloon. I was addressing your specific issue of the £250 that you asked about but there is of course the £3000 exemption as a separate issue.
I know there is a lot of misunderstanding about taxation of gifts by those who don't realise it only affects inheritance tax on their demise and in many cases those who do worry about IHT worry unnecessarily because their estate won't meet the threshold- especially if they are married and their IHT allowance can be transferred on death to the spouse .
So,I'm wondering whether IHT is likely to be an issue?
I know there is a lot of misunderstanding about taxation of gifts by those who don't realise it only affects inheritance tax on their demise and in many cases those who do worry about IHT worry unnecessarily because their estate won't meet the threshold- especially if they are married and their IHT allowance can be transferred on death to the spouse .
So,I'm wondering whether IHT is likely to be an issue?
Presumably you can effectively give someone say £25000 by giving gifts of £250 to 100 different people but ask them to then redirect it to one named person. I would be surprised if HMRC could really keep track of all this.
Anyway, I repeat- it's the estate that pays IHT and in my experience a lot of people misunderstand IHT and worry unnecessarily.
Anyway, I repeat- it's the estate that pays IHT and in my experience a lot of people misunderstand IHT and worry unnecessarily.
ff //Presumably you can effectively give someone say £25000 by giving gifts of £250 to 100 different people but ask them to then redirect it to one named person//
I see no reason why not but, of course, if any of them fail to pass it on there's nothing you can do about it as you made it a gift to them.
I see no reason why not but, of course, if any of them fail to pass it on there's nothing you can do about it as you made it a gift to them.
fiction-factory. Unfortunately, I am involved in IHT - again. I use that adverb as I try to live up to philanthropist Andrew Carnegie's maxim 'A man who dies rich dies disgraced'. Too many have money they don't need that could be put to better use.
Fundsmith qv. made my fortune with their simple philosophy, (not that they always seem to follow it nowadays),
of buying shares in companies that have been around for 100 years or more and who make things that people always need, such as soap. Then do nothing; ie. don't indulge in any of the practices that are supposed to give traders an edge on the market.
Money will also be given to local charities - certainly not to big ones, (The Salvation Army excepted), many of whom have become big businesses with grossly overpaid management, and some even involved in criminal activity which they have tried to cover up.
End of rant.
Fundsmith qv. made my fortune with their simple philosophy, (not that they always seem to follow it nowadays),
of buying shares in companies that have been around for 100 years or more and who make things that people always need, such as soap. Then do nothing; ie. don't indulge in any of the practices that are supposed to give traders an edge on the market.
Money will also be given to local charities - certainly not to big ones, (The Salvation Army excepted), many of whom have become big businesses with grossly overpaid management, and some even involved in criminal activity which they have tried to cover up.
End of rant.
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