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IHT Question I understand that as as the making of gifts

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IHT Question
I understand that as long as the making of gifts does not affect my standard of living such gifts will not incur IHT regardless of how soon I die after making the the gifts. Is there any limit to this? My net income exceeds my "standard of living" expenditure by some £25,000 pa.Can I give such gifts up to £25,000 pa?
Thanks *****
Submitted: 4 months ago.
Category: Tax
Expert:  Sam replied 4 months ago.

Hi

Thanks for your question

No that is not correct - anything in excess of £3000 per year as a lump sum or small regular gifts would be considered exempt - which do not effect your day to day living as they come from your annual income rather than capital or savings.

A gift such as £25000 would always be considered for Inheritance tax should you not live for more than 7 years from the date of the gift.

I am afraid the legislation is not as broad as you would like it to be !

Let me know if I can assist further

Thanks

Sam

Sam, Accountant
Category: Tax
Satisfied Customers: 13713
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Customer: replied 4 months ago.
Thanks. I was relying on the gov.uk wording that says that in addition to the £3,000 limit I could give "normal gifts out of your income e.g. for Christmas or birthday presents - you must still be able to maintain your standard of living after making the gift."
As my income exceeds my living costs by £25,000 I presumed, wrongly, I could make "normal gifts at appropriate times, like Christmas and birthdays, " totalling that amount. Obviously not! Thanks for your help.RT
Customer: replied 4 months ago.
I am happy you have dealt with the question. No more questions at the moment.ThanksRT

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