GIFTS TO CHILDREN

[bob561941]

how much can you give to children and grandchildren each year within the inheritance tax rules ?

[Richard1966]

Any gifts you make to individuals will be exempt from Inheritance Tax as long as you live for seven years after making the gift. These sorts of gifts are known as 'potentially exempt transfers'.
However, if you give an asset away at any time, but keep an interest in it - for example you give your house away but continue to live in it rent-free - this gift will not be a potentially exempt transfer. Follow the link below to find out more.
If you die within seven years and the total value of gifts you made is less than the Inheritance Tax threshold, then the value of the gifts is added to your estate and any tax due is paid out of the estate.

You can give away gifts worth up to £3,000 in total in each tax year and these gifts will be exempt from Inheritance Tax when you die. You can carry forward any unused part of the £3,000 exemption to the following year, but if you don't use it in that year, the carried-over exemption expires.


http://www.direct.gov...yorproperty/DG_179336

[buildersmate]

In addition to Richard's answer, a parent can give a child up to £5k as a one-off wedding present and a grandparent can give up to £2.5k as a wedding present.

[Brinjal]

When you say "a parent"can each parent give a wedding gift to the sum of 5000.00. Even if still married and living together.

[buildersmate]

Yes. Each parent can give up to £5k in cash or gifts.

[Captain Spod]

Yes to all the above, but the one that most people forget is: as much as you can afford. Any amounts paid to anyone are exempt if the gift(s) do not lead to a decrease in the donor's standard of living. The best way to evince this to HMRC is to make regular payments and still take holidays etc.