How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Joshua Your Own Question

Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
35043042
Type Your Law Question Here...
Joshua is online now

My wife and I are in our 70s. We wish to take advantage

Resolved Question:

My wife and I are in our 70`s. We wish to take advantage of allowances we assume to be available to us to avoid potential IHT by each of us making gifts of £3000 for the Tax year 2012/13 and 2013/14 to our daughter, i.e. a total of £12000, equally shared by us. Is this a correct interpretation of the IHT rules please?
Submitted: 3 years ago.
Category: Law
Expert:  Joshua replied 3 years ago.

Joshua :

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.

Joshua :

May I confirm with you that your and your wife's combined estates are worth in excess of £650K please?

Joshua :

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?

Customer:

Our combined estates are not worth in excess of £650,000.

Joshua :

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.

Customer:

Our monthly incomes, through pensions are in excess of our typical spending requirements.

Joshua :

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.

Joshua :

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.

Customer:

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 ?

Joshua :

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

Joshua :

Is there anything else I can help you with?

Joshua :

Does the above answer all your questions or is there anything I can clarify or help you with any further?

Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
Joshua and other Law Specialists are ready to help you

What Customers are Saying:

 
 
 
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
 
 
 

Meet The Experts:

 
 
 
  • Jo C.

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
< Previous | Next >
  • http://ww2.justanswer.co.uk/uploads/EM/emus/2015-7-7_192327_bigstockportraitofconfidentfemale.64x64.jpg Jo C.'s Avatar

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
  • http://ww2.justanswer.co.uk/uploads/BE/benjones/2015-12-1_0437_ennew.64x64.jpg Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    11553
    Qualified Solicitor - Please start your question with 'For Ben Jones'
  • http://ww2.justanswer.co.uk/uploads/BU/Buachaill/2012-5-25_211156_barrister5.64x64.jpg Buachaill's Avatar

    Buachaill

    Barrister

    Satisfied Customers:

    1754
    Barrister 17 years experience
  • http://ww2.justanswer.co.uk/uploads/JO/jojobi/2013-3-19_0265_maxlowryphoto.64x64.jpg Max Lowry's Avatar

    Max Lowry

    Advocate

    Satisfied Customers:

    894
    LLB, 10 years post qualification experience
  • http://ww2.justanswer.co.uk/uploads/UK/UKLawyer/2012-4-12_9849_F2.64x64.jpg UK_Lawyer's Avatar

    UK_Lawyer

    Solicitor

    Satisfied Customers:

    750
    I am a qualified solicitor and an expert in UK law.
  • http://ww2.justanswer.co.uk/uploads/KA/Kasare/kasare.64x64.jpg Kasare's Avatar

    Kasare

    Solicitor

    Satisfied Customers:

    402
    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • http://ww2.justanswer.co.uk/uploads/OS/osh/2015-7-7_19268_gettyimagesb.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    8199
    LL.B (Hons), Higher Prof. Dip. Law & Practice