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TonyTax
TonyTax, Tax Consultant
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If I give my daughter and my granddaughter some money from

Resolved Question:

If I give my daughter and my granddaughter some money from my income, all of which I do not spend, to help them through a difficult time, is this capital gains tax? I have given some shares to relatives but this has been carefully within the amount allowed.
Submitted: 8 months ago.
Category: Tax
Expert:  TonyTax replied 8 months ago.

Hi.

If you give away cash, you won't have a liability to Capital Gains Tax and your daughter and granddaughter won't have to pay tax on it. You will have made gifts.

Normally, the value of gifts stay as part of your estate for seven years after you make them as you can read here unless they are covered by the exemptions which you can read about here.

I hope this helps but let me know if you have any further questions.

Customer: replied 8 months ago.
Thanks for your answer. At the moment I am giving my daughter £80 per month as her husband is out of a job, and my granddaughter £50 a month as she has been ill and had signed up for a course which she cannot complete but the college insists she pays a whole year's fee. Neither payment will last for ever (I hope!). Presumably if I die they would have to declare them somehow and the amount I have given would remain in my estate?
Expert:  TonyTax replied 8 months ago.

The gifts are relatively small. You should keep a record of them for your executor. However, if you are funding these payments comfortably from your monthly income and not dipping into savings then they can treated as "gifts out of income" which don't stay in your estate for seven years.

Your daughter and granddaughter won't have to declare the gifts but if they cannot be treated as gifts out of income, then your executor will need to include those made in the seven years before your death in the valuation of your estate.

Customer: replied 8 months ago.
Thanks again. Sorry, my brain wasn't working; I am giving my daughter £800, and my granddaughter £600 per month. It is still easily out of my income as I am over 80 so get nearly £10,000 state pension as well as a pension from my husband's employers which is very generous in my opinion. So I'm not dipping into any capital. Presumably some of it could be counted as the £3000 which is allowable anyway to give to a daughter?
Expert:  TonyTax replied 8 months ago.

Can you tell me how much you get from your husband's pension pre-tax please.

Customer: replied 8 months ago.
My husbnd's pension was approx £24,000 this past year (gross). I also have some shares which produced about £5,200 net, and a discounted gift plan from which I get £2,500 per year (but I think that's produced from ISAs). Apart from this, I've got some money in the Coventry Building Society from which I got about £300 gross interest.
Expert:  TonyTax replied 8 months ago.

So, you are giving away about £16,800 out of a gross income of about £43,000. That is quite a large proportion but if you don't think it impinges on your lifestyle, then that's fine. You can use the £3,000 exemption and the £250 exemption if the gifts are not gifts out of income.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15840
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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