I have a few newspaper cuttings I've filed away regarding Will making /IHT etc so will try to get to grips with the info there & with yours. I'll return here if any serious questions
Glad you bumped this Jean as it’s v relevant to the Tatters family. We are essentially a family of two and the rest of the buggers no longer talk to us. If we look like we’re about to be carted off they probably will get in touch as we have no offspring to inherit our stuff. I’m looking into how much I can give away now but still leave enough for us to be ok if we suddenly need to buy a new roof.
With regards the section on gifts and the 7 year rule and taper relief. It's worth highlighting the last paragraph which catches a lot of people out: Taper relief only applies if the total value of gifts made in the 7 years before you die is over the £325,000 tax-free threshold.
The reason being gifts are calculated first and therefore the first £325k of any gifts in the prior 7 years simply uses up your tax free allowance. @Arsenetatters - if you have no offspring and the "other buggers" no longer talk to you, why leave them anything? Spend it! Charity, close friend etc etc. I'm not sure if I had distant family who never spoke to me I'd be leaving them anything let alone giving them anything before I died, think I'd rather leave it to the Trust or the Museum!
With regards the section on gifts and the 7 year rule and taper relief. It's worth highlighting the last paragraph which catches a lot of people out: Taper relief only applies if the total value of gifts made in the 7 years before you die is over the £325,000 tax-free threshold.
The reason being gifts are calculated first and therefore the first £325k of any gifts in the prior 7 years simply uses up your tax free allowance. @Arsenetatters - if you have no offspring and the "other buggers" no longer talk to you, why leave them anything? Spend it! Charity, close friend etc etc. I'm not sure if I had distant family who never spoke to me I'd be leaving them anything let alone giving them anything before I died, think I'd rather leave it to the Trust or the Museum!
Thank you @Rob7Lee. My ideal scenario would be to give it away here and there to friends an charities before either we drop dead or have to go into a home. BUT keep enough incase the roof falls in etc. With gifting £3000 per year I’ve vaguely heard about does that mean the recipient doesn’t have to pay tax on it? And can I gift more than one person?
With regards the section on gifts and the 7 year rule and taper relief. It's worth highlighting the last paragraph which catches a lot of people out: Taper relief only applies if the total value of gifts made in the 7 years before you die is over the £325,000 tax-free threshold.
The reason being gifts are calculated first and therefore the first £325k of any gifts in the prior 7 years simply uses up your tax free allowance. @Arsenetatters - if you have no offspring and the "other buggers" no longer talk to you, why leave them anything? Spend it! Charity, close friend etc etc. I'm not sure if I had distant family who never spoke to me I'd be leaving them anything let alone giving them anything before I died, think I'd rather leave it to the Trust or the Museum!
Thank you @Rob7Lee. My ideal scenario would be to give it away here and there to friends an charities before either we drop dead or have to go into a home. BUT keep enough incase the roof falls in etc. With gifting £3000 per year I’ve vaguely heard about does that mean the recipient doesn’t have to pay tax on it? And can I gift more than one person?
Re the £3k, yes there would be no tax to pay, see below. But it is a maximum per tax year of £3k not £3k per person, you can go back one tax year as well if you didn't use it. If there are two of you (a Mrs/Mr tatters) then of course it's £3k each. There is no IHT on Gifts to charity whether during your life or after death (in your will).
Annual exemption
You can give away a total of £3,000 worth of gifts each tax year without them being added to the value of your estate. This is known as your ‘annual exemption’.
You can give gifts or money up to £3,000 to one person or split the £3,000 between several people.
You can carry any unused annual exemption forward to the next tax year - but only for one tax year.
The tax year runs from 6 April to 5 April the following year.
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There is also the small gift allowance
Small gift allowance
You can give as many gifts of up to £250 per person as you want each tax year, as long as you have not used another allowance on the same person.
Birthday or Christmas gifts you give from your regular income are exempt from Inheritance Tax.
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Lastly for weddings and the like:
Gifts for weddings or civil partnerships
Each tax year, you can give a tax free gift to someone who is getting married or starting a civil partnership. You can give up to:
£5,000 to a child
£2,500 to a grandchild or great-grandchild
£1,000 to any other person
If you’re giving gifts to the same person, you can combine a wedding gift allowance with any other allowance, except for the small gift allowance.
For example, you can give your child a wedding gift of £5,000 as well as £3,000 using your annual exemption in the same tax year.
I have a few newspaper cuttings I've filed away regarding Will making /IHT etc so will try to get to grips with the info there & with yours. I'll return here if any serious questions
Glad you bumped this Jean as it’s v relevant to the Tatters family. We are essentially a family of two and the rest of the buggers no longer talk to us. If we look like we’re about to be carted off they probably will get in touch as we have no offspring to inherit our stuff. I’m looking into how much I can give away now but still leave enough for us to be ok if we suddenly need to buy a new roof.
There are different ways you can give money away and still keep control of (some) of it. Put it into Trust. A Discounted Gift Trust - you have access to regular income. A Loan Trust - you have access to a lump sum.
Also, An Investment Bond is not taken into account for means tested benefits, whereas most other assets are.
Also, a Will is not definite. You have 2 years after death to alter a Will using a Deed of Variation. As long as all beneficiaries agree then you can change who gets the Estate.
Comments
I’m looking into how much I can give away now but still leave enough for us to be ok if we suddenly need to buy a new roof.
With regards the section on gifts and the 7 year rule and taper relief. It's worth highlighting the last paragraph which catches a lot of people out: Taper relief only applies if the total value of gifts made in the 7 years before you die is over the £325,000 tax-free threshold.
The reason being gifts are calculated first and therefore the first £325k of any gifts in the prior 7 years simply uses up your tax free allowance.
@Arsenetatters - if you have no offspring and the "other buggers" no longer talk to you, why leave them anything? Spend it! Charity, close friend etc etc. I'm not sure if I had distant family who never spoke to me I'd be leaving them anything let alone giving them anything before I died, think I'd rather leave it to the Trust or the Museum!
Annual exemption
You can give away a total of £3,000 worth of gifts each tax year without them being added to the value of your estate. This is known as your ‘annual exemption’.
You can give gifts or money up to £3,000 to one person or split the £3,000 between several people.
You can carry any unused annual exemption forward to the next tax year - but only for one tax year.
The tax year runs from 6 April to 5 April the following year.
---------------------
There is also the small gift allowance
Small gift allowance
You can give as many gifts of up to £250 per person as you want each tax year, as long as you have not used another allowance on the same person.
Birthday or Christmas gifts you give from your regular income are exempt from Inheritance Tax.
---------------------
Lastly for weddings and the like:
Gifts for weddings or civil partnerships
Each tax year, you can give a tax free gift to someone who is getting married or starting a civil partnership. You can give up to:
If you’re giving gifts to the same person, you can combine a wedding gift allowance with any other allowance, except for the small gift allowance.
For example, you can give your child a wedding gift of £5,000 as well as £3,000 using your annual exemption in the same tax year.
Also, An Investment Bond is not taken into account for means tested benefits, whereas most other assets are.
Also, a Will is not definite. You have 2 years after death to alter a Will using a Deed of Variation. As long as all beneficiaries agree then you can change who gets the Estate.