Giving money away

I think that may be correct but I'm not an expert. Someone will be along soon with greater knowledge.

You can give £3000 per annum without any inheritance liability and I believe this can be backdated for just one year. So you could give him £3000 for last year (assuming you didn't do so during last year), plus £3000 for this tax year. The remaining £34000 would be liable for tax if you die within the next 7 years. I'm afraid I don't know the tax rate but it does decrease during the 7 years.
This £3000 is for gifts from one person. If you are with your son's father he could also give £3000

Thank you for your prompt replies.
Eddiecat, your response was clear and informative.

You can get all the information on gov.uk.

You can give away what you like, but these are possible repercussions:
Inheritance tax - as eddiecat78 says. You may not be liable for inheritance tax anyway. We have done this, and accepted that if we both die in the next 7 years, then a small amount of tax may be due on our estate. Martin Lewis over at MSE explains this well.

Liability for care costs is less straightforward. You cannot give away money or your house, and then claim for the Local Authority to pay your care costs. However, you can give away money as you are intending, at a point where you are in reasonable health, and with no expectation of needing care in the near future. If something catastrophic & unexpected happened, then you could, if needed, still claim for care costs. Again, you may not be eligible for local authority funding anyway, so it would have no effect.

Very generous of you - they are fortunate

Always best to ask your solicitor and your accountant.

I keep excellent books of every outgoing - normal routine and gifts. I believe each person can give £3K pa to anyone they wish, plus small wedding gifts and other small gifts. Out of income people may also give gifts to anyone. I know of no limit, or we don't near any limit with our gifts to our AC, GC, GGC.

Ask your accountant.

To further muddle - we always give to our daughters their children's school/University and maintenance fees, their lessons, and home deposits - I keep records and we follow guidance of our accountant.

We gave that amount to our AC a few years ago towards a house purchase. We had to sign something to say this was a gift and not a loan.
I rather hoped it was a loan, but ….
Anyway how about looking at opening a joint account with your son.

Not everyone has or can afford an accountant Norah

GSM will know

She’s gone CrazyH

What do you mean Bluebelle?

She’s been banned

Oh dear - she was very helpful to me !

BlueBelle

Not everyone has or can afford an accountant Norah

Perhaps money is well spent on an accountant or solicitor, when one is considering a gift -- just a thought. Typically cost less than they save.

eddicat78 and Nannarose have given the right answers to your question.

BlueBelle

She’s been banned

Could she not sneak back in as MGS 😊

There is no gift tax in the UK.
If your estate is likely to be subject to inheritance tax, and most aren’t, gifts given within 7 years of your death will still form part of your estate.
Deprivation of Assets for any means-tested assessment can go back more than 7 years, but intention is what counts, so if you are currently unlikely to be in need of either benefits or care, DoA should not be an issue.

Don’t want to sound too pessimistic but I think there will be some changes to inheritance tax and gifts given within the 7 years time frame. But best assume the worst! Not long until October statement.

silverlining48

We gave that amount to our AC a few years ago towards a house purchase. We had to sign something to say this was a gift and not a loan.
I rather hoped it was a loan, but ….
Anyway how about looking at opening a joint account with your son.

We had the same with our daughter when we provided the deposit for her house.
The guidance on the form was that if we said it was a gift, that was all there was to it.
If we said it was a loan, she had to say how much and when she was repaying us, and show that she had sufficient income to pay the loan as well as her mortgage each month.

ronib

Don’t want to sound too pessimistic but I think there will be some changes to inheritance tax and gifts given within the 7 years time frame. But best assume the worst! Not long until October statement.

There are likely to be changes but they will not be retrospective, if you are going to gift do it before the budget

The 7 year rule only matters if your assets are worth over the inheritance tax limit when you die . Leaving your house to a child or grand child increases the limit . Sadly it does not look likely that this limit will be increased soon.

You can give someone as much money as you want, £100,000,£500,000, but if you die within 7 years then decreasing amounts of your gift will be taken into account when calculating the Inheritance tax due on your estate.

So die in year 1, if your estate is worth more than £325,000 then the whole will be added on for inheritance tax. If your total estate including the gift is less than £3225,000 then no tax will be paid.

Can you give 3000 to each of your children....I have 4. Or is it just one lot of 3000 which would have to be divided between them???

It’s the £3k between them travels. However, if you didn’t give last financial year you can do that retrospectively, so a potential £6k between them.
Your husband (if you are married) can do the same.