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Where Taxpayers and Advisers Meet

Annual lmit of gifts to child

rks2018
Posts:61
Joined:Sun Sep 16, 2018 1:27 pm
Annual lmit of gifts to child

Postby rks2018 » Fri Oct 29, 2021 5:12 pm

Hello All,
I have a question please regarding how much we can annually gift our child, is it 3k per person or 3k in total one can make gift to child's bank account?
We are not married so not sure if it makes a difference? Or if grandparents can also make separate 3k max per year gifts? Thanks in advance

Samson22
Posts:55
Joined:Mon Aug 17, 2020 10:54 am

Re: Annual lmit of gifts to child

Postby Samson22 » Fri Oct 29, 2021 8:57 pm

It is 3k per person so assuming there are 2 grand parents it could be in total 12k. Moreover anyONE can gift on top of this up to £250 to any number of other individuals (IE IF THEY HAVE NOT ALLREADY received the 3k). I guess I should add if the 3k was not given in the prior tax year you can gift £6k per each person for one year but that is a one off Ie can only be back dated a year.

bd6759
Posts:3744
Joined:Sat Feb 01, 2014 3:26 pm

Re: Annual lmit of gifts to child

Postby bd6759 » Sat Oct 30, 2021 11:19 am

A bit more context is needed. There are no gift taxes in UK so you can gift as much as you want. The £3000 limit is simply disregarded from your estate should you unfortunately die within 7 years of making the gift.

And how old is the “child”.

rks2018
Posts:61
Joined:Sun Sep 16, 2018 1:27 pm

Re: Annual lmit of gifts to child

Postby rks2018 » Mon Nov 01, 2021 11:22 pm

2years old, I thought 3k a year was except from iht,

AGoodman
Posts:1418
Joined:Fri May 16, 2014 3:47 pm

Re: Annual lmit of gifts to child

Postby AGoodman » Wed Nov 03, 2021 4:49 pm

I'd go slightly further than bd6759 and say that the £3,000 exemption is fairly irrelevant in most tax planning. You should give as much as you want to your child.

If you give more than £3,000 p.a. (e.g. £10,000), you have to survive 7 years for the excess £7,000 to leave your estate completely for inheritance tax. However, if you only give £3,000, the excess £7,000 is in your estate indefinitely and therefore at much greater risk of inheritance tax on your death. Until you get into very large sums in excess of £325k in a seven year period, there is rarely any tax advantage to limiting your gifts (there are of course practical advantages to not giving all your money away).

langtonbrow
Posts:45
Joined:Tue Mar 10, 2009 1:52 pm

Re: Annual lmit of gifts to child

Postby langtonbrow » Tue Dec 14, 2021 12:27 am

Should it not also be mentioned that gifts out of surplus income (of any size) are exempt from IHT?

What I am not clear on is whether the 7 year rule applies under this scenario, or whether the gifts are immediately exempt if one provides good noted evidence of circumstances?

AGoodman
Posts:1418
Joined:Fri May 16, 2014 3:47 pm

Re: Annual lmit of gifts to child

Postby AGoodman » Tue Dec 14, 2021 4:49 pm

Regular gifts out of surplus income are exempt from the off, not potentially exempt.


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