Quizzes & Puzzles18 mins ago
gifts of money
5 Answers
My ex husband wishes to give our children a gift of money but has been told that this is restricted to something like �5000 each a year and anything more than this incurs costs. Can anyone tell me if they know anything about this.
Answers
Best Answer
No best answer has yet been selected by Cumbria41. Once a best answer has been selected, it will be shown here.
For more on marking an answer as the "Best Answer", please visit our FAQ.There's no limit on how much you can give or invest for your children or grandchildren. But the interest might be taxed as your income if you're the child's parent or step-parent and your child's unmarried, not a civil partner and under 18
Each parent has a separate �100 limit. So if both parents contribute equally your child could get interest of �200 a year without either of you having to pay tax on it.
There's a separate �100 limit for each step-parent too
Each parent has a separate �100 limit. So if both parents contribute equally your child could get interest of �200 a year without either of you having to pay tax on it.
There's a separate �100 limit for each step-parent too
He is allowed to give up to �3,000 in each tax year and if he has not given any last year he can make it �6,000 for this year. There will not be any IHT on these gifts even if he does not live for a full seven years after making the gift.
Any gift over this amount will be a 'Potentially Exempt Transfer' and will not be included in his estate as long as he survives for seven years. He is also allowed to make 'Gifts Out Of Income' which must be regular and given out of his normal income from say his Salary. It must not reduce his standard of living nor be paid from Capital such as a savings account. The point made by Tom Braider about interest being taxed as the parents is correct.
Any gift over this amount will be a 'Potentially Exempt Transfer' and will not be included in his estate as long as he survives for seven years. He is also allowed to make 'Gifts Out Of Income' which must be regular and given out of his normal income from say his Salary. It must not reduce his standard of living nor be paid from Capital such as a savings account. The point made by Tom Braider about interest being taxed as the parents is correct.