Is there a legal(ish) way to give cash to our children ?

[Dave7]

Not been to a financial expert yet.....just testing the water here.
I will say at the outset that I doubt there is.
Situation......
We are both well into our 70s and will never spend what we have.
The rest is, I think, fairly obvious.

 

[Sterlo]

Either buy more bikes, or send some this way, I can always help you spend it. On a serious note, my daughter has found out that there is a limit to how much we could gift her to put towards a deposit on a house, it can be no more than 25% of the deposit. To my mind, what does it matter where the money is from (legally of course, we could prove it was a gift). Sadly, the govt don't want us to save nowadays, just spend it. 😠

 

[Joffey]

Would someone come on here and ask how to commit benefit fraud and think it's ok, as long as it's legal(ish)?

 

[Badger_Boom]

My understanding is that there are perfectly legal ways to do this and that the only sensible advice is to talk to an independant financial adviser.

Giving some of what you've earned to your children is neither money laundering nor benefit fraud, and no doubt they'll pay plenty of tax on whatever they chooose to sepnd it on.

 

[raleighnut]

It used to be OK as long as you lived for 7 yrs after the 'gift', if you died before then it was still classed as part of your 'estate' and liable for Tax (if you had above a certain amount)

 

[Sharky]

All depends on the numbers, of which I don't have a clue. But I know my uncle used to give all his nephews and nieces a healthy amount each Christmas. Gifts up to a certain amount are exempt from tax etc.

 

[vickster]

You can gift a certain amount a year (? up to 3k for each of you and your wife) but if you die within 7 (?) years they may be liable for inheritance tax on it
Ask an accountant or financial adviser ( or Google for link to hmrc site)

 

[T4tomo]

Not been to a financial expert yet.....just testing the water here.
I will say at the outset that I doubt there is.
Situation......
We are both well into our 70s and will never spend what we have.
The rest is, I think, fairly obvious.

you can gift what you want when you want tax free to them, but you need to live 7 years for it to be completely free of Inheritance tax - it tapers off each year of the 7 (since the gift) that you survive. I.e. any gifts given in the 7 years preceding your death get looked at when IHT to calculated on your estate.

so get gifting and just hope they dont kick you out onto the streets.

There are more complex rules around your property you live in, but if its surplus cash and investments get transferring it to their names...

 

[fossyant]

Best just moving a bit of hard cash, if you know what I mean. You'll struggle with loads, but a few quid here and there would be ok as cash. Not via bank. Expensive that gardener was.

MrsF's mum used to stash cash in the house. She wouldn't change, but MrsF collected it up and kept it safe for her. She passed away recently and she was able to give her sister's a grand each. The rest comes from the house sale after care fees, but the cash has helped them. MrsF has spent it on her mum's house with redecoration etc.

Any big amounts wil fall into the 6/7 year ruling. If you've cash assets that you want to lose, Id get that expensive gardener each month.

 

[PK99]

Either buy more bikes, or send some this way, I can always help you spend it. On a serious note, my daughter has found out that there is a limit to how much we could gift her to put towards a deposit on a house, it can be no more than 25% of the deposit. To my mind, what does it matter where the money is from (legally of course, we could prove it was a gift). Sadly, the govt don't want us to save nowadays, just spend it. 😠

Any sum can be gifted as cash and then used in what ever way the giftee wishes.

 

[Milkfloat]

This will give you a general run down. https://www.gov.uk/inheritance-tax/gifts

 

[wormo]

From memory, each person has an allowance of £3000 they can give before paying inheritance tax. Gifts under £250 are unlimited. The rules are complicated if you give assets.

 

[Arrowfoot]

Collect all your thoughts and see a financial advisor. Its worth it.

 

[Kingfisher101]

You cant really trace how you have spend your cash as long as the other person doesnt bank it.

 

[PK99]

Not been to a financial expert yet.....just testing the water here.
I will say at the outset that I doubt there is.
Situation......
We are both well into our 70s and will never spend what we have.
The rest is, I think, fairly obvious.

It depends on the sorts of numbers you are considering.

We (mid 60's) have gifted large sums to our kids, as "potentially exempt transfers". Potential = potentially liable to IHT, but exempt after 7 years
Most is now out of the 7 years of phasing down.

There is no tax at the point the gift is made.

Our house alone is well into IHT territory, but it depends on your position - will your estates be big enough for IHT? if not, then give it there will be no tax due.

But: Don't listen to random strangers here, consult either Citizen's advice is the numbers are small, or a financial advisor if the numbers are large