Property, Mortgages & Insurance
1.3K views | +0 today
Follow
Property, Mortgages & Insurance
Organising Personal Finance
Curated by Docarte
Your new post is loading...
Scooped by Docarte
Scoop.it!

GIFTS

Small gis that dont create an Inheritance Tax liability

Docarte's insight:

GIFTS

 

Small gis that dont create an Inheritance Tax liability

 

HM Revenue & Customs allows you to make a number of small giſts each year, without creating an Inheritance Tax liability (IHT). Remember, each person has their own allowance, so the amount can be doubled if each spouse or registered civil partner uses their allowances.

You can also make larger giſts, but these are known as ‘Potentially Exempt Transfers’ (PETs), and you may have to pay IHT on their value if you die within seven years of making them.

 

The estate may not have to pay IHT on assets the deceased gave away as giſts while they were alive.

 

A giſt can be:

  • Anything that has a value, for example, money, property, possessions
  • A loss in value when something’s transferred, for example, if a parent sells a house to a child for less than it’s worth, the difference in value counts as a giſt.

 

There’s no IHT payable on any giſt married couples or registered civil partners give each other – as long as they live in the UK permanently.

 

Seven-year rule

 

Taper relief applies where tax, or additional tax, becomes payable on your death in respect of giſts made during your lifetime. The relief works on a sliding scale. The relief is given against the amount of tax you’d have to pay rather than the value of the giſt itself. The value of the giſt is set when it’s given, not at the time of death.

 

The original owner must live for seven years aſter giving the giſt. If they don’t, their estate or the person who received it will have to pay IHT on it.

 

The amount due is reduced on a sliding scale if the giſt was given away between three and seven years before the person died.

 

For example:

  • You’d made a non-exempt giſt of £350,000 on 1 February 2011 and died on 20 June 2014
  • The IHT nil rate threshold at the date of death was £325,000
  • The giſt exceeds the threshold by £25,000
  • Full rate of tax on the giſt: 40% x £25,000 = £10,000
  • The giſt was made within three to four years of death, so taper relief at 20% is due
  • Taper relief: £10,000 x 20% = £2,000
  • Revised tax charge: £10,000 - £2,000 = £8,000.

 

 WHEN THE PERSON WHO RECEIVED THE GIFT PAYS INHERITANCE TAX


Anyone who received a giſt from the deceased in the seven years before they died may have to pay IHT if the deceased gave away giſts worth more than £325,000 in that time.

HM Revenue and Customs (HMRC) will tell the person that received the giſt if they have to pay IHT.

 

GIFTS YOU DON’T PAY INHERITANCE TAX ON


The estate doesn’t pay IHT on up to £3,000 worth of giſts given away by the deceased in each tax year (6 April to 5 April). This is called the ‘annual exemption’. Leſtover annual exemption can be carried over from each tax year to the next, but the maximum exemption is £6,000.  Certain giſts don’t count towards the annual exemption and no IHT is due on them, for example, wedding giſts and individual giſts worth up to £250.

 

WEDDING GIFTS


There’s no IHT on a giſt that was a wedding or registered civil partnership giſt worth up to:

  • £5,000 to a child
  • £2,500 to a grandchild or great-grandchild
  • £1,000 to anyone else

The giſt must be given on or shortly before the date of the wedding or registered civil partnership ceremony.

 

GIFTS UP TO £250


There’s no IHT payable on individual giſts worth up to £250 – unless in the same tax year, the deceased gave the same person:

  • More than £250 worth of giſts
  • Other giſts that are free from Inheritance Tax, for example, a wedding giſt or a giſt that counts towards their £3,000 annual exemption.

 

REGULAR GIFTS FROM THE GIVER’S INCOME


There’s no IHT payable on giſts from the deceased’s income (aſter they paid tax) as long
as the deceased had enough money to maintain their normal lifestyle. The giſts include:

  • Christmas, birthday and wedding or registered civil partnership anniversary presents
  • Life insurance policy premiums
  • Regular payments into a savings account.

 

PAYMENTS TO HELP WITH LIVING COSTS


There’s no IHT payable on giſts to help with other people’s living costs. These include payments to:

  • An ex-husband, ex-wife or former registered civil partner
  • A relative who’s dependent on them because of old age, illness or disability
  • A child (including adopted and stepchild) under 18 years old or in full-time education.

 

CHARITIES

 

There’s no IHT payable on giſts to charities, museums, universities or community amateur sports clubs.

 

POLITICAL PARTIES


There’s no IHT payable on giſts to political parties that have either:

  • Two members elected to the House of Commons
  • One member elected to the House of Commons and received at least 150,000 votes in a general election.

 

How can we help?

 

With regular reviews, we can help you to ensure that you make the most of your estate planning requirements. Contact us today to find out more.

more...
No comment yet.
Rescooped by Docarte from Property, Mortgages & Insurance
Scoop.it!

ESTATE FACTS - Why it could pay to know your trivia  

ESTATE FACTS - Why it could pay to know your trivia

 

INTRODUCTION OF DEATH TAXES

Death taxes were first introduced in England during 1796, in order to, finance the

war against French military and political leader Napoleon Bonaparte.  The Government brought in Inheritance Tax in 1986, and it was originally supposed to be a tax on the rich. More and more people are now being caught by this tax largely due to house price inflation.

 

SHORTEST WILL ON RECORD

The shortest Will on record consists of only four Hindi characters and was written by Bimla Rishi on 9 February 1995.  The characters translated as 'all to son'.  Running a close second to this is the Will of German businessman Karl Tausch, who wrote the Czech words 'Vse zene' on 19 January 1967, translated as 'all to wife'.  For a Will to be valid in England and Wales, it must be witnessed and signed by two people.  A spouse or child cannot act as a witness if they are to inherit.  This is a major stumbling point for many who draw up their Will without the advice and guidance of a lawyer, because the Will is then invalidated under UK inheritance law.

 

THE LONGEST WILL ON RECORD
The longest Will ever filed for probate is believed to be that of English woman Frederica Evelyn Stillwell Cook, who died at age 68 on 9 January 1925.  Her Last Will and Testament document consisted of 1,066 pages written in four leather-bound volumes and presented for probate at Somerset House in London.  Almost all of Mrs Cook’s bequests were to her children, but particularly interesting clauses were added which included the instruction that her two executors should burn her diaries and that her age was not to be inscribed on her gravestone.

 

THE OLDEST RECORDED WILL

The oldest recorded Wills are believed to be that of two ancient Egyptians called Ankh-ren and his brother Uah.  Both Wills were written in hieroglyphics at around 1797 BC.  They were found by archaeologist William Mathew 'Flinders' Petrie in 1890 and offered proof to legal historians that the practice of distribution of property and naming guardians for children had been occurring for thousands of years.  The Will of Uah had also been witnessed by two signatories, both scribes.

more...
No comment yet.
Scooped by Docarte
Scoop.it!

ESTATE FACTS - Why it could pay to know your trivia  

ESTATE FACTS - Why it could pay to know your trivia

 

INTRODUCTION OF DEATH TAXES

Death taxes were first introduced in England during 1796, in order to, finance the

war against French military and political leader Napoleon Bonaparte.  The Government brought in Inheritance Tax in 1986, and it was originally supposed to be a tax on the rich. More and more people are now being caught by this tax largely due to house price inflation.

 

SHORTEST WILL ON RECORD

The shortest Will on record consists of only four Hindi characters and was written by Bimla Rishi on 9 February 1995.  The characters translated as 'all to son'.  Running a close second to this is the Will of German businessman Karl Tausch, who wrote the Czech words 'Vse zene' on 19 January 1967, translated as 'all to wife'.  For a Will to be valid in England and Wales, it must be witnessed and signed by two people.  A spouse or child cannot act as a witness if they are to inherit.  This is a major stumbling point for many who draw up their Will without the advice and guidance of a lawyer, because the Will is then invalidated under UK inheritance law.

 

THE LONGEST WILL ON RECORD
The longest Will ever filed for probate is believed to be that of English woman Frederica Evelyn Stillwell Cook, who died at age 68 on 9 January 1925.  Her Last Will and Testament document consisted of 1,066 pages written in four leather-bound volumes and presented for probate at Somerset House in London.  Almost all of Mrs Cook’s bequests were to her children, but particularly interesting clauses were added which included the instruction that her two executors should burn her diaries and that her age was not to be inscribed on her gravestone.

 

THE OLDEST RECORDED WILL

The oldest recorded Wills are believed to be that of two ancient Egyptians called Ankh-ren and his brother Uah.  Both Wills were written in hieroglyphics at around 1797 BC.  They were found by archaeologist William Mathew 'Flinders' Petrie in 1890 and offered proof to legal historians that the practice of distribution of property and naming guardians for children had been occurring for thousands of years.  The Will of Uah had also been witnessed by two signatories, both scribes.

more...
No comment yet.
Scooped by Docarte
Scoop.it!

Today is Mortgage Freedom Day

Today is Mortgage Freedom Day | Property, Mortgages & Insurance | Scoop.it
New borrowers can celebrate Mortgage Freedom Day today as on average homeowners have earned enough to cover their UK mortgage payments for the rest of 2018, Halifax found.
more...
No comment yet.
Scooped by Docarte
Scoop.it!

Digital mortgage service sounds handy, right? Oh, it's through UK.gov's Verify • The Register

Digital mortgage service sounds handy, right? Oh, it's through UK.gov's Verify • The Register | Property, Mortgages & Insurance | Scoop.it
Keys in hands of highly borkable ID gateway
more...
No comment yet.
Scooped by Docarte
Scoop.it!

'We put £500,000 into Aim shares to avoid inheritance tax'

'We put £500,000 into Aim shares to avoid inheritance tax' | Property, Mortgages & Insurance | Scoop.it
Bernard Dokelman and his wife have assets of £4m - and a plan to dramatically
reduce the amount of inheritance tax owed
more...
No comment yet.
Scooped by Docarte
Scoop.it!

Cherie Blair leads legal fight against buy-to-let tax rise 

Cherie Blair leads legal fight against buy-to-let tax rise  | Property, Mortgages & Insurance | Scoop.it
The wife of former Labour Prime Minister Tony Blair is representing a group of several hundred investors who are lobbying against a tax increase in Britain announced by Chancellor George Osborne.
more...
No comment yet.
Scooped by Docarte
Scoop.it!

Non-doms' UK property to be drawn into inheritance tax net | STEP

Non-doms' UK property to be drawn into inheritance tax net | STEP | Property, Mortgages & Insurance | Scoop.it
The British government's summer Budget announced yesterday includes two momentous measures affecting non-domiciled residents from April 2017.
more...
No comment yet.
Scooped by Docarte
Scoop.it!

Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

Digital tax: 'HMRC wants a direct link to everyone's bank accounts' | Property, Mortgages & Insurance | Scoop.it
Have you filed your return by today's deadline? Next time the process will be
different as HMRC rolls out new, digital services
Docarte's insight:

Be afraid...

more...
No comment yet.
Scooped by Docarte
Scoop.it!

Buy-to-let stamp duty rise 'final nail in coffin' for small landlords

Buy-to-let stamp duty rise 'final nail in coffin' for small landlords | Property, Mortgages & Insurance | Scoop.it

Someone buying an additional property worth £150,000 will pay 10 times more in
tax after the change than they do today

more...
No comment yet.
Scooped by Docarte
Scoop.it!

Low rates and new tax breaks for savers are making me rethink my mortgage

Low rates and new tax breaks for savers are making me rethink my mortgage | Property, Mortgages & Insurance | Scoop.it

The Personal Savings Allowance could prompt a decline in 'offset' mortgages,
says Andrew Oxlade

more...
No comment yet.
Scooped by Docarte
Scoop.it!

Ten biggest changes to personal finances in 2016

Ten biggest changes to personal finances in 2016 | Property, Mortgages & Insurance | Scoop.it

Whether its new rules on pensions, savings or energy efficiency we set out
what lays in store for you this year

more...
No comment yet.
Scooped by Docarte
Scoop.it!

Landlords raise £50k to fight buy-to-let tax relief crackdown

Landlords raise £50k to fight buy-to-let tax relief crackdown | Property, Mortgages & Insurance | Scoop.it

Two landlords looking to fight the Government after it announced last summer it was cracking down on mortgage interest tax relief on buy-to-let properties have raised £50,000 in nine days .

more...
No comment yet.
Scooped by Docarte
Scoop.it!

Bad news — London is NOT in a housing bubble and prices will remain high for decades

Bad news — London is NOT in a housing bubble and prices will remain high for decades | Property, Mortgages & Insurance | Scoop.it
Market conditions are very different compared with the financial crisis of 2008.
Docarte's insight:

The naivety in this article is astounding! The toxic debt within the banking system is at a level greater than it was in 2007/2008. There appears to be no appreciation that the global economy is in the thrall of a perfect storm - structural deficiencies in the banking sysytem, market manipulations, legislation which merely tinker at the edges, schemes designed to help buyers onto the property market which are massively flawed, extended QE, etc. What goes up continues to go up, eh?! If you bury your head in the sand, you're liable to get your butt kicked!

more...
No comment yet.
Scooped by Docarte
Scoop.it!

AUTUMN STATEMENT: Osborne abandons plans to slash police budget

AUTUMN STATEMENT: Osborne abandons plans to slash police budget | Property, Mortgages & Insurance | Scoop.it
The NHS, defence, foreign aid and housing are set to be the big winners, but the police, transport, justice and the environment will bear the brunt, with families braced for big hikes in council tax bills.
more...
No comment yet.
Scooped by Docarte
Scoop.it!

Why Millennials and Generation Xers Need to Worry About Estate Planning

Why Millennials and Generation Xers Need to Worry About Estate Planning | Property, Mortgages & Insurance | Scoop.it
Estate planning is important for everyone, and those who consider it unnecessary need to know that it can have a significant impact on their family and finances.
more...
No comment yet.
Scooped by Docarte
Scoop.it!

Foreign buyers avoid tax with buy-to-let loophole

Foreign buyers avoid tax with buy-to-let loophole | Property, Mortgages & Insurance | Scoop.it
A loophole in George Osborne’s crackdown on buy-to-let landlords will allow wealthy overseas investors to continue to profit from the property boom across Britain, it emerged last night.
more...
No comment yet.
Scooped by Docarte
Scoop.it!

People are hiding cash in their microwaves as Sweden gets closer to being the first cashless society with negative interest rates

People are hiding cash in their microwaves as Sweden gets closer to being the first cashless society with negative interest rates | Property, Mortgages & Insurance | Scoop.it
"I've heard of people keeping cash in their microwaves because banks won't accept it."
Docarte's insight:

We've seen the future...  Nice experiment soon to be rolled out across the Western Economies.

more...
No comment yet.
Scooped by Docarte
Scoop.it!

The number of £1m mortgages in the UK has risen by a fifth

The number of £1m mortgages in the UK has risen by a fifth | Property, Mortgages & Insurance | Scoop.it
NatWest, owned by Royal Bank of Scotland, said it granted 233 mortgages of more than £1 million in 2014, and so far this year has issued another 207
more...
No comment yet.
Scooped by Docarte
Scoop.it!

Chinese set to invest $13b in UK property - Business - Chinadaily.com.cn

Chinese set to invest $13b in UK property - Business - Chinadaily.com.cn | Property, Mortgages & Insurance | Scoop.it
In 2014, the UK saw an estimated inflow of $3.12 billion investments from Chinese mainland buyers, an international real estate portal said in its report.
more...
No comment yet.
Scooped by Docarte
Scoop.it!

Deutsche Bank: We can already see how London's insane property bubble will end

Deutsche Bank: We can already see how London's insane property bubble will end | Property, Mortgages & Insurance | Scoop.it
Political intervention and rising interest rates are going to bring the rocket back down to earth.
more...
No comment yet.
Scooped by Docarte
Scoop.it!

Estate planning: IHT average bill rises as figure tops £170k

Estate planning: IHT average bill rises as figure tops £170k | Property, Mortgages & Insurance | Scoop.it
The average bill for an estate paying inheritance tax rose to over £170,000 – an annual increase of almost £5,000 or 3 per cent, a report has conclude...
more...
No comment yet.
Scooped by Docarte
Scoop.it!

What will China’s Black Monday mean for the UK?

What will China’s Black Monday mean for the UK? | Property, Mortgages & Insurance | Scoop.it
As jittery investors brace for more shockwaves after last week’s rout on world markets, we look at the impact, from property to petrol prices
more...
No comment yet.
Scooped by Docarte
Scoop.it!

Own a European holiday home? New rules mean you can now choose who inherits it

Own a European holiday home? New rules mean you can now choose who inherits it | Property, Mortgages & Insurance | Scoop.it
For the first time British investors with assets in the EU can avoid tough European succession rules
more...
No comment yet.
Scooped by Docarte
Scoop.it!

A system for getting your child a property that starts with charging them - Telegraph.co.uk

A system for getting your child a property that starts with charging them - Telegraph.co.uk | Property, Mortgages & Insurance | Scoop.it
One of Britain's leading mortgage experts shares his own DIY system that helps kids get on to the property ladder but also makes money for parents
more...
No comment yet.