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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I would like to give a grandson £10,000 as house deposit .Is

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I would like to give a grandson £10,000 as house deposit .Is this allowable ? I at present pay tax at standard rate as does my grandson. On my death my estate will not reach inheritance tax level. Thanks
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

You can gladly give your grandson a gift of £10,000 towards a house deposit. It would be regarded as pottentially exempt transfer for inheritance tax purposes and the seven year rule applies to it. In simple terms, if you survive for 7 years after making the gift, then this gift is outside the scope of IHT.

As you have indicated your estate is unlikely to reach the threshold. In the event of death before 7 years this gift would be be added to your estate. Provided this remains below the threshold, there would be no IHT payable.

The recipient of the gift receives this money free of tax as there is no tax on gifts.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

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Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes.

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