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
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?
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.
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.
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