Gifting my son £5k

Tax implications only if you die in the next 7 years and your estate is over the inheritance tax barrier. It is a sliding scale from year one to 7 . If you are not over the tax threshold if is nobody's business and no tax to be paid.

You can give away a total of £3,000 each tax year to people other than exempt beneficiaries without paying tax.

You can gift up to £3.000 per tax year without paying tax. It would help you if you do it in 2 years if he can wait for it.

Kaggi, thought about what you have written. I think I’ve got it now.
Do you mean split the £5000? If he wants to buy a house now he probably can’t wait. Even if the OP dies, and I hope that’s not on the cards the tax won’t be much.

I thought that if you hadn't gifted any money, in the previous year, that you would then have £6000.00 to gift this year.

Perhaps I am wrong, but someone on here will know.

I'm very confused about this. Is it only cash handouts that are covered by this £3000 annual limit?

If you, for example, were to spend in excess of that amount paying for a grandchild's school skiing trip, or buying them an expensive musical instrument or sports equipment, would that spending also be taxed?

When you die, does somebody go through your bank accounts looking to see where your money has gone?

I think you can buy gifts oldgoat. Just going to suggest that to my mum??
No one went through my dad’s bank accounts but if the revenue want to then they can. I think the council can too if they suspect you gave your property, for instance, to your children to avoid care home costs.

I think you are right Auntieflo and you can give 6K, 3K for the present tax year and 3 k for the previous one.As long
as you live for 7 years Ladytina none of this matters.

Phew, thanks MOMB.

I did this last year, for 6 grandchildren, and held my breath
?

You can gift 5k towards a childs wedding without tax implications.

What is this verb to 'gift'.

If you should need care and cannot afford it without a state contribution, this could be seen as deprivation of assets. There is no time limit on that.

kitty What is this verb to 'gift'.
It’s HMRC language for the verb ‘to give’

We gave our daughters £15k each as they could make good use of it now. We did not take any steps regarding tax and neither did they.

If your son is married you could give each person £3,000. Keeps it simple in case you need to give him/them a top up.

You can give away as much as you want. There's only a tax implication if you die within 7 years.

From the Money Advice website 'What and how much you wish to give your children or other members of your family is completely up to you.

But to ensure that it’s tax-free, it’s important to plan when to make that gift.

Simply put, so long as you live more than seven years from when you make this gift, your children or family won’t have to pay Inheritance Tax (IHT) on your gift when you die.'

If you do not reach the tax limit for Inheritance tax you can give away as much as you like every year BUT if you go into a care home soon after they can claim you gave it away to avoid fees .

As I said jane!

I said that upthread floradora. It does not have to be aoon afterwards.

It is less likely to attract attention if it is out of disposable income. The small print has words to the effect of 'gifts that do not cause you to lower your living standard'. I gave DS deposit for a house and paid off DD's mortgage.
At present I am paying school fees for GC too, hopefully reducing the inheritance tax payable when we have gone.

If you make a gift to your child how do you record when you make it for the purpose of the seven year rule? Do you have to involve a solicitor or is it enough to write a letter saying: "We Jupiter and Juno give to our daughter Juventas the sum of £X on this day" and then all parties sign it?

Personally I wouldn’t record it anywhere - it’ll be in bank records but it’s vanishingly improbable that anyone will check. IHT must be about the unfairest tax of all so I’m very relaxed in my attitude towards whether my estate ends up being charged the right amount

Can you not gift money in the December of 1st year and January of the next making it 2 x separate years that way avoiding any tax payment due.

It needs to be this year because it is for an house purchase in the next six months. From answers I have seen up thread it seems that neither my husband and myself nor our daughter will pay any tax at all so long as we live for seven years after the gift. I was thinking of recording the date to avoid any dispute about that and I suppose to prove that we did not require care at the date of the gift.