Gifts of money

[moter goose]

Is there a monetary limit that can be gifted to relative without incurring a tax penalty?

[dzug2]

Unlimited.

Tax only comes into it if the donor dies within 7 years and their total estate (including the gifts) is above the inheritance tax limit.

[Buenchico]

You can as much as you like to whom you like without any DIRECT tax implications. (i.e. gifts don't count as 'income' when HMRC are assessing Income Tax, and there's no such thing as 'gift tax').

However IF you were to die within 7 years of making the gift, all or part of the money (depending upon the period of time that had elapsed) could be counted towards the value of your estate when deciding if there was any liability for Inheritance Tax. IF the total value of your estate came to over £325,000 (or to whatever figure the threshold had risen to by the date of your death), there would be a liability for Inheritance Tax.

Rules here:
http://www.hmrc.gov.u...ey-property/index.htm

Chris

[237SJ]

Yes. £3000 pa

[boxtops]

Can you still insure against dying during the 7-year period? when I worked in insurance, a hundred years ago, you could buy a 6-year policy called Gifts Inter Vivos (gifts between living people) which insured against the chance of dying before the 7 years were up, and which paid out an amount to cover the tax then payable.

[factor-fiction]

The £3000 figure is taken from the rules set out in Buenchico's link. If you are interested in the IHT aspects then it's worth reading all the rules in the link

[moter goose]

Thanks to all for your help

[kinell]

just take it out of the bank in cash.......

who could tell where and what you 'spent' that money on....

providing the recipient isnt daft enough to stick the readies in the bank..