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Where Taxpayers and Advisers Meet

IHT gifts from income

Jason123456
Posts: 21
Joined: Wed Oct 11, 2017 1:53 pm

IHT gifts from income

Postby Jason123456 » Mon Feb 12, 2018 6:57 pm

My wife and I have a joint bank account

I have monthly SO’s set up for my grandchildren for regular Pocket money...I want it to be arranged as payments from me, although coming from a joint bank account(the contents of which is mainly my monthly pension fund payments). i.e to be seen as gifts from My income for Hmrc purposes.
If I get my wife to write and sign a note/letter for my records,that this is the case(the SO’s are from me and not jointly or her) would this suffice for HMRC?

AGoodman
Posts: 521
Joined: Fri May 16, 2014 3:47 pm

Re: IHT gifts from income

Postby AGoodman » Tue Feb 13, 2018 11:46 am

I don't think so, because whatever the note says, the cash is coming from jointly owned monies so would be treated as 50:50 from each of you. You would need to do it from an account in your sole name.

Jason123456
Posts: 21
Joined: Wed Oct 11, 2017 1:53 pm

Re: IHT gifts from income

Postby Jason123456 » Tue Feb 13, 2018 12:53 pm

If all outgoing bills are in my name but are coming from a joint account does the same apply?....and in view of the fact that the majority income going into the joint account is from me.

pawncob
Posts: 4146
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: IHT gifts from income

Postby pawncob » Tue Feb 13, 2018 5:47 pm

Any statement of intent will suffice as proof. A letter from you to grandchildren stating your intent will almost certainly satisfy any (very unlikely) query from HMRC.
I assume the payments are from "spare" income and can't be challenged on those grounds.
With a pinch of salt take what I say, but don't exceed your RDA

Jason123456
Posts: 21
Joined: Wed Oct 11, 2017 1:53 pm

Re: IHT gifts from income

Postby Jason123456 » Tue Feb 13, 2018 5:56 pm

Will such a letter have to be retained by grandchildren,or would my copy suffice?....I ask because a couple of grandchildren are only 10years old.

pawncob
Posts: 4146
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: IHT gifts from income

Postby pawncob » Tue Feb 13, 2018 5:59 pm

As it's relevant to your estate I suggest you keep it.(and send copies to the kids)
With a pinch of salt take what I say, but don't exceed your RDA

Jason123456
Posts: 21
Joined: Wed Oct 11, 2017 1:53 pm

Re: IHT gifts from income

Postby Jason123456 » Tue Feb 13, 2018 7:03 pm

In previous message why do you say (very unlikely)....are you acquainted with it not happening?

Jason123456
Posts: 21
Joined: Wed Oct 11, 2017 1:53 pm

Re: IHT gifts from income

Postby Jason123456 » Tue Feb 13, 2018 7:19 pm

Is there a correct way or wrong way of wording the letter of intent......ie, would I need to mention that it comes from my income and from a joint account, and/or any other wording?

pawncob
Posts: 4146
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: IHT gifts from income

Postby pawncob » Wed Feb 14, 2018 1:33 pm

In dealing with many estates I've never had a challenge from HMRC on gifts from income.
Letter needs to state that you are making the gift despite it being paid from joint source. Search for examples on line.
With a pinch of salt take what I say, but don't exceed your RDA

Jason123456
Posts: 21
Joined: Wed Oct 11, 2017 1:53 pm

Re: IHT gifts from income

Postby Jason123456 » Fri Mar 16, 2018 4:29 pm

Would this process be seen (by HMRC) as gifts coming from my income.....

My Income>Joint Account>S.O.>My Sole Account>S.O’s as Gifts to others.


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