Gifts - Parents to Children

[uuf361]

This is probably a very daft question, but want to check.

I know you can give gifts of £3,000 per annum, but can each parent give a gift of £3,000 to each child, i.e. £6,000 per annum ?

HMRC is silent which means I assume they can as they have separate estates in effect but just want to ensure.....

[anonymous-user]

uuf361 said:

This is probably a very daft question, but want to check.

I know you can give gifts of £3,000 per annum, but can each parent give a gift of £3,000 to each child, i.e. £6,000 per annum ?

HMRC is silent which means I assume they can as they have separate estates in effect but just want to ensure.....

Each parent can gift £3k. So 1 kid could get £6k or 2 kids £3k each or 3 kids £2k each etc. or however you want to split it.

[Dr Mike Oxgreen]

Indeed. All the IHT allowances and exemptions are on an individual basis. (Except when one spouse dies and transfers any unused IHT allowance to the surviving spouse.)

[uuf361]

That's what I thought but always a good idea to check.

Thanks for the input

[anonymous-user]

You probably know but, just in case, the IHT on gifts tapers off and reaches zero after seven years if you are still alive and, in any case, IHT on the gifts applies only if your estate is greater than 325k. Also, if the gifts are made from your income, vs capital, and do not impair your own cash flow they don’t count for IHT anyway.

[uuf361]

Yep, knew those bits, thanks

[sas62]

For one year only you can double the 3k to 6k (ie carry forward the allowance from the last year )

[uuf361]

Yep, that’s being done this year to use up the 16/17 allowance too

[TFP]

Hang On said:

You probably know but, just in case, the IHT on gifts tapers off and reaches zero after seven years if you are still alive and, in any case, IHT on the gifts applies only if your estate is greater than 325k. Also, if the gifts are made from your income, vs capital, and do not impair your own cash flow they don’t count for IHT anyway.

Some good points here.

I would add that Taper Relief only applies where the cumulative gifts in the preceding 7 years exceeds the Nil Rate Band.

Put simply, you need to first give away £325,000 before Taper Relief applies to gifts in excess of this.

HTH

[LeadFarmer]

Does the £3k gift limit still apply even if the parents total estate is under the inheritance tax threshold?

So if a parent only has £10k to their name and gives £5k to their child, does the £3k rule still apply?

[Jockman]

no

[sjj84]

You can also give larger gifts for special occassions such as weddings. Can't remember the figure off hand, possibly 5k.

[uuf361]

sjj84 said:

You can also give larger gifts for special occassions such as weddings. Can't remember the figure off hand, possibly 5k.

Yep, £5k for a child, £2.5k for a grandchild

[Eric Mc]

If you don't plan on dying anytime soon - you can give as much as you like.

[uuf361]

Eric Mc said:

If you don't plan on dying anytime soon - you can give as much as you like.

Very true

[williaa68]

You may also find that if you are lucky enough to have parents who want to gift more you can insure against the potential CGT liability fairly cheaply, if they aren’t too old / infirm. Play around with the quotes on cavendish online or call them (I have no affiliation but they are very cheap)