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Gifting money to grandson

Discussion in 'Personal' started by minnie me, Sep 20, 2019.

  1. minnie me

    minnie me Star commenter

    Our son is looking to move house possibly before Christmas . Expensive time ! My Mum is happy to help him financially. Her estate is not worth £300, 000 plus . Is there a limit to what she can give him ? I find the rules confusing ? :confused: Cheers
  2. Ivartheboneless

    Ivartheboneless Star commenter

    I "gifted" my daughter the deposit so she could buy my house off me at reduced price with a mortgage for the rest. I just had to sign some letter for the solicitors to prove it.
  3. mothorchid

    mothorchid Star commenter

    I think you can give away £3000 in a year, without tax being involved. If you do it for this tax year and the next one (or the last one - check which it is) you can double this. It's £3000 in total, not that amount per person, so that needs to be taken into account. But if your dad is still alive (and happy to help too) he could also give away the same amount?
    There are tax implications if someone gives away more than this, but I don't know what they are.
    Maybe a long term loan, on no interest would be better? It would need to be drawn up properly, though.
  4. FrankWolley

    FrankWolley Star commenter

    If the giver lives 7 years after the date of the gift, the sum is not part of their estate for Inheritance Tax purposes* (though if the giver has to go into full time care paid for by the local council, they might question this gift, depending on the date of the gift and when care is required. If they find out, of course;))

    *Of course if the estate is under £300,000 this won't apply.

    PS I'm no expert, but this is what I understand to be the case...
    emerald52, lindenlea and Lara mfl 05 like this.
  5. LondonCanary

    LondonCanary Star commenter

    There is no limit to what you may give away.
    If you die within seven years of the gift and inheritance tax is due, some is due on the gift. Currently the threshold for IHT is £325,000.

    Should you need care later, gifts totalling over £3000 may be seen as an avoidance to reduce your savings to a level that entitles you to state assistance.
    emerald52 and Lara mfl 05 like this.
  6. Lara mfl 05

    Lara mfl 05 Star commenter

    People who say there's no limit are correct and in reference to the 7 year rule there's a 'sliding scale on how much your son might have to pay should you Mum die within the 7 years. My f-i-l 'gifted his grandson a plot of land and he survived for 6 and I think it was something like 16 1/2% of the value of the land he had to repay. Fortunately there was enough in the estate for us to help him out with that, but it is something to consider, if your mum is getting on in age.

    And yes should she need care there could be other implications with her 'proving' the gift was not a way of avoiding paying for her care.
    emerald52 and grumpydogwoman like this.
  7. FrankWolley

    FrankWolley Star commenter

    Indeed it may, but if there is no evidence that the giver is likely to need such care at the time of the gift, it is difficult to prove (so give in good time, whilst in good health...;))

    NB If the giver spends their money on, say, cruises, new cars, gambling, expensive meals etc. there is no comeback. Which seems illogical...o_O
    border_walker and Lara mfl 05 like this.
  8. minnie me

    minnie me Star commenter

    Ok - thanks for those responses. Nothing in theory or practice which would suggest to anyone that my Mum is deflecting her assets in order to avoid care at this moment in time . I suspect how this is ‘ judged ‘ could be a minefield ... nothing to stop get I suppose x number of dollars out of the bank and heading for the bookies for a flutter (or 5 ). I have a friend who spends his dosh collecting Japanese prints - his passion. The last one cost in excess of £2200 ( plus VAT )- each to their own.
    mindymole and Lara mfl 05 like this.
  9. burajda

    burajda Star commenter

    The giver could also spend money on sovereigns (no VAT) and other assets like art, even japanese prints, certainly speculative as such assets can decline in value, but can easily be gifted.
  10. minnie me

    minnie me Star commenter

    My MIL spent in excess of £1200 a month for about a year on / off funding carers 4 x times a day after a series of strokes. She has been living independently for over two years ( doing very well ) now so has recouped some of her savings... she was in respite for 6 weeks @ some point or so which she did not fund and which helped her enormously. She sold her home over 9 years ago to downsize and gave some of the profits then ( in good health ) to my husband and his sister. She offloads cash when she can - not massive amounts though not well off by any means
  11. grumpydogwoman

    grumpydogwoman Star commenter

    Lara mfl 05 likes this.
  12. minnie me

    minnie me Star commenter

  13. jubilee

    jubilee Star commenter

    Everyone has an Inheritance tax allowance of £325k. A couple can pass on £650k without It being levied if the first to di passes their allowance unused to their spouse. In addition each person can pass on another £125k tax free from a property that they leave to a child or grandchild. So, for many couples there will be no OH on joint estates up to £900k.

    As the OP's mother has an estate below her personal allowance IN is never going to be an issue when she dies. She can gift whatever she likes to anyone.

    We all have a £3k per year gift allowance which means that the value of the gift will NEVER be considered part of your estate in death. If you didn't give away the previous tax year's gift allowance you can carry it over to the next tax year and give out £6k without fear of future tax on it. We did that last year when I have my son £6k and mr.jubilee have the same to our daughter. This tax year we are limited to £3k each to give away tax free.
    If course anyone can give away far more than that gift allowance and the excess over £3k will be potentially liable for Inheritance Tax if the donor does not survive 7 years. If wanting to give a larger sum then it's the earlier the better.
    There is an additional gift allowance for when someone marries.
    If the recipient of your largesse is on means-tested benefits be careful about taking their bank account over the level where benefits are reduced or stopped.
    emerald52, minnie me and FrankWolley like this.

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