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Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
May I confirm with you that your and your wife's combined estates are worth in excess of £650K please?
May I also ask at present do you and your wife enjoy monthly income over and above your typical spending requirements - e.g. through pensions and so on - or is this not the case?
Our combined estates are not worth in excess of £650,000.
Thank you. In that case you can give away as much as you want just as you like. The £3K limits are only relevant if your combined estates are worth more than £650K.
Our monthly incomes, through pensions are in excess of our typical spending requirements.
Your understanding of the rules are absolutely correct but they are only relevant if your estates are liable for inheritance tax. The way the rules work is they provide that if you give more than £3K in any one year away (except that you can roll over last years unused gift allowance) then the HMRC will treat any amount over your allowance as still being part of your estate when working out the value for inheritance tax. So for example if you had £500K between you and your wife and you gave your daughter £20K today and died tomorrow HMRC would allow £12K as an allowance but treat the other £8K as still being part of your estate giving your new estate value as £500K - £12K = £488K and IHT would be assessed on £488K. Because you and your wife have £650K between you as an allowance you don't pay any tax on the above example either way.
Essentially if your estate is below the value of £650k between you you need not pay any attention to the £3K yearly allowances and can give away whatever you want within your means without concern.
So, it would appear that in our situation we could make an immediate gift of ,say £25000 without any tax implications under the Gifts inter vivos rules in the event of our joint deaths within the next 7 years ?
Providing your estate is worth under £650K that is correct. £13K of that gift would still be treated as being within your estate but as your estate is worth less than the £650K allowance there is no tax implication
Is there anything else I can help you with?
Does the above answer all your questions or is there anything I can clarify or help you with any further?