IHT Exempt Transfers

IHT Exempt Transfers

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Taxpayer has (say) three sons, two daughters-in-law and seven grandchildren.
In this tax year can he give each son £2,000 each, nothing was given in the tax year 2005-2006, and in addition 9 gifts of £250 each?
On 06 April 2007 can he follow on with £1,000 to each son and again 9 gifts of £250?
Someone's clarification will be greatly appreciated.
Gerald Lunn

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By yeboyye
30th Jan 2007 16:43

IHT exempt transfers
Many thanks Simpleson I think I've got it. I hadn't thought of the capital/income bit.
Don't want to labour the point but for the sake of this question can we assume the individual has no income at all and has exactly £291,250 in a non-interest paying bank current account. He has just won a prize to be a DJ on a desert island and wishes to give away all his money. Fortunately he has found someone with a passport photograph and a utility bill who is willing to accept the gift.
Do we have a £285000 PET, £6000 covered by two annual exemptions and, unfortuately for the willing recipient, £250 that has to be held until the following tax year?
Thank you in anticipation.
Gerald Lunn

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By User deleted
30th Jan 2007 23:28

In theory, there would be £100 liability
until following 5th april,.

When he gives £250 to the luiky recipient. if he gives a post dated cheque, postdated till 6th April 2007 -and his bank takes any notice of the date- then his gift only takes place when his bank account is debited, not when he hands over the cheque, nor even when the payee pays it into his/her own bank account

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By User deleted
29th Jan 2007 10:47

Sounds correct, but can taxpayer improve on this ?
If he is intending to maintain gifts at the 2007/8 level, and has sufficient income, he could write a letter to each son and daughter in law, saying he is making this gift now to them and their children , and hopes to be able to maintain the gift at this level for many years


In principle , that will mean that all the gifts except £3000 in 2006/7 qualify for normal expenditure exemption., leaving significant capacity to use the existing exepmt limits again !!

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