Tax Query

[nannakath]

Can anyone answer this question for a relative? They plan to give family and friends £250 each as lifetime gifts using the small gift exemption.Also planning to make potentially exempt transfers (PETs) to the same people on or around the same date. The PETs will form part of the taxable estate but will HMRC deem the small gifts to be linked to the PETs and therefore include them in the taxable estate? Thank you for your help to this query.

[Peter Pedant]

it is all here

http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

[Peter Pedant]

oops sorry
damn I keep on answering without reading the d question

read the URL

it says clearly - but read it anyway to make sure - that the 250 and 3000 aggregate CANNOT be to the same person

but the one everyone forgets - keep records - is that you can given any yes any amount from income so long as it doesnt decrease your life style standard. but clearly in this case - clear convincing records have to be kept

[nannakath]

Thank you Peter. This person has a terminal illness so the main query was the link to PETs and the `small gift` exemption.

[Peter Pedant]

Remember if there is a spouse, all transfers to the spouse is IHT and capital gains tax free ! (CGT is 'rolled over')

otherwise it is, as above

[nannakath]

Thanks again Peter. Single person in this case.