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Annual gift allowance

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    Annual gift allowance

    When my mother died, my brother and I were sole recipients of her will but we know she had promised a certain amount to a local charity, and was planning to gift a certain amount to her brother - having recently inherited from my grandfather herself, she was planning to gift some of this to him.

    We therefore plan to honour her wishes now her house has sold; the charity is easy but since we didn't alter the will we now need to give this money to our uncle directly and we run into IHT issues in the unlikely event we die in the next 7 years!

    https://www.moneyadviceservice.org.u...gift-allowance

    How much is the annual ‘gift allowance’?

    While you’re alive, you have a £3,000 ‘gift allowance’ a year. This is known as an annual exemption.

    This means that you can give away assets or cash up to a total of £3,000 in a year without incurring Inheritance Tax.

    Certain gifts don’t count towards this annual exemption. As such, no Inheritance Tax is due on them.

    Gifts that are worth more than the £3000 allowance are subject to Inheritance Tax.

    The amount of tax to pay on these gifts depends on whether it was given within 7 years before the person died.

    You can carry over any leftover allowance from one tax year to the next, up to a maximum of £6,000.

    If you do this, you have to use up all your allowance in that tax year.

    In other words, you can’t accumulate several years’ worth of allowance and use it up in a single large gift.
    I was interested to note the part underlined above, about carrying over allowance. But the wording is confusing me... neither of us has gifted anything for several years so does that mean the limit we each give before IHT is a factor is actually £3k, £6k or £6k + this year's £3k?
    Originally posted by MaryPoppins
    I'd still not breastfeed a nazi
    Originally posted by vetran
    Urine is quite nourishing

    #2
    How much are you talking about. Just both give him half them amount now and hope you live 7 years. Then call him Robert

    If it is small amount, but your estate is going to be much more than the threashold, then it is going to be insignifcant. Might as well do it all now.

    If it is a large amount, best to do it all now.

    But to answer you question. you can do £6k this tax year to inculde last years as well. Then £3k next year, £3k the year after etc..

    Comment


      #3
      You're worrying uncessarily. Take the money out in cash and just give it to him. Who the fook is going to be able to trace that.
      What happens in General, stays in General.
      You know what they say about assumptions!

      Comment


        #4
        Read the thread on Bitcoins. Apparently it's a great way to launder money.

        Comment


          #5
          Form a Company with you and your Bro. as shareholders. Loan the company the money you wish to donate. Sell your shares to your uncle at face value plus a nominal percentage. Uncle has the loan repaid to him.

          Trusts are also available.

          IANYA. Professional Tax Advice is what you need.
          I was an IPSE Consultative Council Member, until the BoD abolished it. I am not an IPSE Member, since they have no longer have any relevance to me, as an IT Contractor. Read my lips...I recommend QDOS for ALL your Insurance requirements (Contact me for a referral code).

          Comment


            #6
            Just change the will to reflect the money going to your uncle see https://www.gov.uk/alter-a-will-after-a-death
            merely at clientco for the entertainment

            Comment

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