Gifts to Children

[JIMMYJOHN]

I had posted a question earlier, which Peter had answered. My new question is how much money can I give to my son who lives abroad in China, without attracting any tax liability.

Once again thanks in advance .

[Peter D]

As much as you like, but the value will remain in your estate for 7 whole years as this would be a PET Potentially Exempt Transfer. I assume the value is less that £325,000.
However you can give a total of £3,000 each year without any IHT implications. If you did not gift last year you can give £6,000. It is possible to give them money for your excess income but it has to be set up properly and done on a regular basis over a period of time. Regards Peter

[JIMMYJOHN]

As much as you like, but the value will remain in your estate for 7 whole years as this would be a PET Potentially Exempt Transfer. I assume the value is less that £325,000.
However you can give a total of £3,000 each year without any IHT implications. If you did not gift last year you can give £6,000. It is possible to give them money for your excess income but it has to be set up properly and done on a regular basis over a period of time. Regards Peter

Thanks Peter, I understand the PET bit, but if if give him money as and when he needs it (as opposed to a regular payment) would either of us have any problems.

Thanks

[Peter D]

There is no tax issue, but as and when may cause 'you' an accumulative IHT PET issue if the value of gifts exceeds the £3,000. Can you put these gifts in context, what size are these gifts in a year. Regards Peter

[JIMMYJOHN]

There is no tax issue, but as and when may cause 'you' an accumulative IHT PET issue if the value of gifts exceeds the £3,000. Can you put these gifts in context, what size are these gifts in a year. Regards Peter

The gifts will be between 15 - 20 k each year for the next two years.

Thanks

[Peter D]

Assuming these gifts will reduce you capital assets over the two years then they will be deemed Pets and remain in your estate for 7 whole years if there is an IHT issue. However if these were regular monthly payments made from surplus income thus not effecting your assets during the two years then you may be exempt from the PET issue. My view is the two years may be a bit short. Regards Peter