Gifting assets – know the rules!
There are grandparents who will want to keep on giving: but how generous should they be?
It is natural that grandparents want to offer children and grandchildren support – they may be buying their first home, going to university or opening a bank account. Often, they wish to make gifts to their loved ones during their lifetimes so that they can see the gifts being enjoyed.
However, while nominal sums from surplus income, along with the usual Christmas and birthday presents are not usually a problem, care needs to be taken for gifts that go beyond that and it is wise for anyone considering substantial giving to take trusted and sound advice before doing so, to ensure they understand the full implications of their generosity.
For example, did you know that people you gift to could be charged inheritance tax upon your death in certain circumstances? Similarly, in the event of you requiring assistance with care fees in the future, it may be that the gifts you have made could be challenged by the local authority.
What is a gift? Quite simply it is anything that has a value, including money, property or possessions. And when you think of it like that, you may soon realise that your gifts can easily mount up.
There are certain things you can do with no inheritance tax implications: annual gifts totalling no more than £3,000 can be given; small gifts of £250 to unlimited people (not to include those you have included in your annual gifts); and gifts to charities and political parties are exempt.
The main point here is to be careful, plan for the future and be clear about what you cannot do.
For advice on all aspects of estate and succession planning and inheritance tax, please contact Rebecca on 01522 515978 or visit wilkinchapman.co.uk