Crosswords4 mins ago
giving your children money
I'd like to give my children some money..How much can i give them each year and does the year start and finish in april.. I dont want them paying tax on it if i snuff it..
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Basically to avoid tax you need to live for 7 years AFTER giving the gift.
It says on that web site
The seven-year rule - 'potentially exempt transfers'
Any gifts you make to individuals will be exempt from Inheritance Tax as long as you live for seven years after making the gift. These sorts of gifts are known as 'Potentially Exempt Transfers' (PETs).
However if you give an asset away at any time, but keep an interest in it - for example you give your house away but continue to live in it rent-free - this gift will not be a potentially exempt transfer. Follow the link below to find out more.
If you die within seven years and the total value of gifts you made is less than the Inheritance Tax threshold, then the value of the gifts is added to your estate and any tax due is paid out of the estate.
However, if you die within seven years of making a gift and the gift is valued at more than the Inheritance Tax threshold, Inheritance Tax will need to be paid on its value, either by the person receiving the gift or by the representatives of the estate.
If you die between three and seven years after making a gift, and the total value of gifts that you made is over the threshold, any Inheritance Tax due on the gift is reduced on a sliding scale. This is known as 'Taper Relief'.
It says on that web site
The seven-year rule - 'potentially exempt transfers'
Any gifts you make to individuals will be exempt from Inheritance Tax as long as you live for seven years after making the gift. These sorts of gifts are known as 'Potentially Exempt Transfers' (PETs).
However if you give an asset away at any time, but keep an interest in it - for example you give your house away but continue to live in it rent-free - this gift will not be a potentially exempt transfer. Follow the link below to find out more.
If you die within seven years and the total value of gifts you made is less than the Inheritance Tax threshold, then the value of the gifts is added to your estate and any tax due is paid out of the estate.
However, if you die within seven years of making a gift and the gift is valued at more than the Inheritance Tax threshold, Inheritance Tax will need to be paid on its value, either by the person receiving the gift or by the representatives of the estate.
If you die between three and seven years after making a gift, and the total value of gifts that you made is over the threshold, any Inheritance Tax due on the gift is reduced on a sliding scale. This is known as 'Taper Relief'.
thanks dzug2.. thats the impression i was under..and my brother said he read in the daily mail a week or so back that you could do that.. but what is to stop me selling my house splitting my money between my kids and going into an old folks home for the rest of my days without paying £800 or£900 per week ..just paying my pension contributions for my keep?
ubasses you cannot give £3000/year for EACH child. You can give £3000k/year in total. Here is a C&P from HMRC's website.
Annual exemption
You can give away gifts worth up to £3,000 in total in each tax year and these gifts will be exempt from Inheritance Tax when you die. You can carry forward any unused part of the £3,000 exemption to the following year, but if you don't use it in that year, the carried-over exemption expires.
Hope sammo sees this.
Annual exemption
You can give away gifts worth up to £3,000 in total in each tax year and these gifts will be exempt from Inheritance Tax when you die. You can carry forward any unused part of the £3,000 exemption to the following year, but if you don't use it in that year, the carried-over exemption expires.
Hope sammo sees this.
thanks ladybird i did see your answer, but as i wont be liable to inheritance tax because my total assets are less than £325K ..I have found out that i can give away as much as i like to my kids.. and the tax man cant do anything about it.. There was an article in the money pages of The Daily Mail on march the 28th.. a man had asked a similar question to mine.. problems only start to arrise if you've got over £325K.. thanks for all your answers..
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