Inheritance tax question
Discussion
Ok, completely hypothetical.
Parent wants to give child large cash gift prior to death.
Would it be a problem, legally, for both parent and child to "collude", in losing and winning a bet (on Betfair say), so that money passes from one to the other?
I know that this is probably illegal, but in reality, is it traceable?
Just the product of a drunk conversation about tax.
Parent wants to give child large cash gift prior to death.
Would it be a problem, legally, for both parent and child to "collude", in losing and winning a bet (on Betfair say), so that money passes from one to the other?
I know that this is probably illegal, but in reality, is it traceable?
Just the product of a drunk conversation about tax.
firths carpets said:
gIVE child money as a gift each year, subject to limits. and you can give large sums but parent has to outlive 7 years. Ask an accountant or ring the tax office Anon
Yeah, I know - it was just a query about possible issues with "giving" money by losing "legal" bets, as a means to move larger sums of money.
Not a real situation though, so no worries.
Could be traced on betfair or any internet based betting scheme if someone wanted to. Betfair and the like also alert the authorities to things like this if they spot them.
Completely hypothetically of course, cash bets on an ongoing basis at a bookies couldn't be traced, neither could large losses in poker games
Completely hypothetically of course, cash bets on an ongoing basis at a bookies couldn't be traced, neither could large losses in poker games
You can gift what you like to whom you like without ANY tax implications - provided you don't die within seven years of making the gift.
You can give away an amount of £3,000 each year without fear of IHT ever being charged.
If you haven't used up your £3,000 Gift Allowance in the proceeding year, you can bump the current yera gift allowance up to £6,000.
You can give larger amounts to offspring in advance of their marriage as well - outside of the £3,000 limits.
Betting companies are signed up to the Money Laundering and Proceeds of Crime regulations and are legally obliged to report to the Serious and Organised Crime Authority (SOCA) and SUSPICION (note - they do not need any proof) of possible unlawful activity - including tax evasion.
You can give away an amount of £3,000 each year without fear of IHT ever being charged.
If you haven't used up your £3,000 Gift Allowance in the proceeding year, you can bump the current yera gift allowance up to £6,000.
You can give larger amounts to offspring in advance of their marriage as well - outside of the £3,000 limits.
Betting companies are signed up to the Money Laundering and Proceeds of Crime regulations and are legally obliged to report to the Serious and Organised Crime Authority (SOCA) and SUSPICION (note - they do not need any proof) of possible unlawful activity - including tax evasion.
As per my trusty copy of Tolley's
Section 22 IHTA
Gifts in Consideration of Marriage or a Civil Partnership
From Parent - £5,000
From Grandparent - £2,500
From one New Spouse to other New Spouse/ New Party in Civil Partnership to other New Party in Civil Partnership - £2,500
Anyone to Newlyweds/New Civil Partnership participants - £1,000
Section 22 IHTA
Gifts in Consideration of Marriage or a Civil Partnership
From Parent - £5,000
From Grandparent - £2,500
From one New Spouse to other New Spouse/ New Party in Civil Partnership to other New Party in Civil Partnership - £2,500
Anyone to Newlyweds/New Civil Partnership participants - £1,000
Google "Marriage gift exemption", Piglet - from memory, it allows you to give up to £5,000 to a child and £2,500 to a grandchild.
I have a vague recollection of there being a reduced exemption for gifts to anyone else - £1,000 or £1,500 from very dim and distant memory.
ETA: Beaten to it, and more comprehensively answered, by "Quick Draw" Eric!
I have a vague recollection of there being a reduced exemption for gifts to anyone else - £1,000 or £1,500 from very dim and distant memory.
ETA: Beaten to it, and more comprehensively answered, by "Quick Draw" Eric!
Edited by Lurking Lawyer on Thursday 15th February 13:52
Eric Mc said:
You can gift what you like to whom you like without ANY tax implications - provided you don't die within seven years of making the gift.
How on earth do 'the authorities' police this, though? There's a lot of money sloshing around in my daughter boyfriends family circle and a family friend bought him a £20K car recently - if the friend kicked the bucket, how would HMRC know about the gift? Indeed, whose duty would it be notify HMRC of the gift?
thewave said:
Eric Mc said:
The executor or solictor handling the deceased's estate.
Would a 'friendly' solicitor be useful?
They don't exist - seriously, 14 years max' in prison for money laundering, so solicitors are tighter than a ducks ass when it comes to dodgy tax issues.
The original conversation was just something that I was discussing with a solicitor who is looking at the different trusts they can set-up for a client with ~£8M estate, so the annual allowances mean squat. Obviously some spouse allowance etc, but I was trying to be a bit more "creative".
IANAL, obviously. And therefore I wouldn't suggest trying to defraud HMRC in any way....9 inches and all that.
Tolleys are one of the best known publishers of taxation reference books in the UK. They produce a vast array of books covering all elements of UK taxation. The book I use is a fairly concise (only 859 pages) "summary" of the basic rules and regulations of Income Tax, VAT, Corporation Tax, Capital Gains Tax and Stamp Duty
Toplleys is now part of the Lexus/Nexus group..
Toplleys is now part of the Lexus/Nexus group..
Eric Mc said:
Tolleys are one of the best known publishers of taxation reference books in the UK. They produce a vast array of books covering all elements of UK taxation. The book I use is a fairly concise (only 859 pages) "summary" of the basic rules and regulations of Income Tax, VAT, Corporation Tax, Capital Gains Tax and Stamp Duty
Toplleys is now part of the Lexus/Nexus group..
Toplleys is now part of the Lexus/Nexus group..
Whats the name of the chap (possibly ex-judge) who wrote books on Trusts? Said that if anyone ever had problems using one of his trusts he would *personally* work for them in court?
Can't help on that one.
The problem with trusts is that the Revenue are tackling the various types of trusts each time they realise they have a problem with that particular type of trust. Therefore, a trust that was fully workable in tax year 2004/05 may be pointless in 2006/07.
It really is a queation of the Revenue moving the goal posts whilst the match is still on. What's more, some of the revised trust legislation is retrospective so they may go back and recover tax previously assumed legitimately avoided in what had been a perferctly legal trust set-up.
The problem with trusts is that the Revenue are tackling the various types of trusts each time they realise they have a problem with that particular type of trust. Therefore, a trust that was fully workable in tax year 2004/05 may be pointless in 2006/07.
It really is a queation of the Revenue moving the goal posts whilst the match is still on. What's more, some of the revised trust legislation is retrospective so they may go back and recover tax previously assumed legitimately avoided in what had been a perferctly legal trust set-up.
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