Professional Documents
Culture Documents
Tax Exempt Gifts
Tax Exempt Gifts
Number
Summary
Many taxpayers are aware that there is an annual inheritance tax exemption of £3,000 for gifts,
this can be carried forward to the following tax year if not used to make a maximum gift of
£6,000. You can also give as many gifts of up to £250 per person as you want during the tax year
but only if you haven’t used another exemption on the same person and there are also special
allowances for gifts made at a wedding or civil ceremony. These gifts are ignored in the event of
the donor’s demise within 7 years of making the gift.
It is also possible for wealthier taxpayers to make tax exempt gifts and payments that are paid
out of income. With proper planning this can be a useful tool for example to enable
grandparents to help pay school fees for their grandchildren.
However, careful consideration has to be given to ensure that these payments form part of the
transferor’s normal expenditure and is made out of income and not out of capital. The transferor
must also ensure that they are left with enough income for them to maintain their normal
standard of living after giving the gift.
Show Text