Independent Financial Life Planners Bishop's Stortford: Gifting money to Grandchildren

Thursday, 8 May 2014

Gifting money to Grandchildren

For many grandparents Enables IFA’s in Bishops Stortford know that the thought of such huge loans can be a worry. If you are considering gifting one of your grandchildren some money it is good to know what the tax implications are.

You can give up to £3,000 per tax year which will be immediately exempt from inheritance tax, this allowance is called an annual exemption. If you haven’t made any gifts in the previous tax year then you can carry forward the unused allowance making £6,000 to gift which is immediately free from inheritance tax.

If you are feeling especially generous and are making gifts of £250 or less then, in addition to the annual exemption, you can take advantage of the small gifts allowance. This allowance ensures that you can make cash gifts of up to £250 to as many people as you want and this will be immediately free from inheritance tax. However, this allowance cannot be made to someone who has benefited from the annual exemption already. If you are looking to make regular gifts to your grandchildren then they may fall within the rules governing gifts out of normal expenditure.

If you make gifts, which do not fall within these exemptions, then the gift could be a potentially exempt transfer; this means that you need to survive seven years from the date of making the gift for the gifts not to be subject to inheritance tax. If you survive seven years from the date of the gift then it is free from inheritance tax however, if you do not survive the full seven years then these gifts will use part of the nil rate band (£325,000 for the 2011/2012 tax year) which is available to offset against your estate.

To make sure you are maximising the tax benefits of any gift by running it by Enable’s IFA’s in Bishops Stortford.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

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IFA Bishop's Stortford

At Enable Independent we know that our clients trust us and rely on our advice to help them to plan a better, more secure financial future. This is a responsibility that we take very seriously especially because we know that many clients have chosen us on the recommendation of friends and family. Each one of our advisers has deep expertise in their area of specialist knowledge and, as a team, we hold some of the highest qualifications available in the financial advice industry.

Our job satisfaction comes from using our skills to find workable, affordable and flexible solutions to meet our clients needs. Whether we are planning for known future funding requirements such as house purchase, school fees or income in retirement - or for the unforeseen such as job loss, long-term illness or early death, our independence from any product provider enables us to view the marketplace impartially. Our training permits us to look beyond a product's marketing hype and select on the basis of its fitness for purpose.