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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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Hello, re regular cash gifts being exempt from inheritance

Resolved Question:

Hello,
re regular cash gifts being exempt from inheritance tax.
Are there any stipulations on how these gifts are made, e.g must they be a regular amount / taken on a monthly basis / by standing order, or can they be different amounts taken out as cash?
Many thanks for your help.
Darren
Submitted: 3 years ago.
Category: Law
Expert:  UKSolicitorJA replied 3 years ago.
Hello,

To whom are these gifts intended to be made?
Customer: replied 3 years ago.

The son of 2 parents

Customer: replied 3 years ago.

the son of 2 parents

Expert:  UKSolicitorJA replied 3 years ago.
Thank you.

Each parent may gift away a total of £3000 each year known as the annual exemption, which may be carried from one year to the next e.g. If no gift was made last year, then a total of £6000 may be gifted this year by each parent.

This may be spread out as instalments e.g. 12 instalments of £250 each per month or £500 per month if last years exemption was not used.

Can I assist further?
Customer: replied 3 years ago.

Thanks, XXXXX XXXXX thought there was an essentially 'unlimited' exempt gift allowance if payments were regular and were easily afforded by the parents?

Expert:  UKSolicitorJA replied 3 years ago.
That exemption only applies to net income of the parents I.e. Out of parents' taxed income per month, or pensions or interest income but not savings capital.

The parents should still be able to continue living their normal lifestyle after making these regular payments from their income and can be set up as a standing order per month. There is no set limit per month, it all depends on what you can afford to gift away and still maintain your lifestyle.

Hope this clarifies.

Customer: replied 3 years ago.

Thank you - last one - so given all the above, different amounts could be given away as cash withdrawls, for example, from an ATM i.e. there is no stipulation that direct debit / standing orders are used and that dates and amounts are regular! Darren

Expert:  UKSolicitorJA replied 3 years ago.
The payments have to be regular, direct debits and standing orders help to prove regular payments, ATM withdrawals are harder to prove.

Hope this clarifies.
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