{"id":3751,"date":"2017-12-14T18:00:52","date_gmt":"2017-12-14T18:00:52","guid":{"rendered":"https:\/\/www.riaabarkergillette.com\/uk\/?p=3751"},"modified":"2025-04-11T07:30:59","modified_gmt":"2025-04-11T07:30:59","slug":"christmas-gifts-keep-giving","status":"publish","type":"post","link":"https:\/\/www.riaabarkergillette.com\/uk\/christmas-gifts-keep-giving\/","title":{"rendered":"Christmas gifts that keep on giving"},"content":{"rendered":"\n

While larger gifts may be taken into account, anyone can make smaller gifts or gifts out of surplus income without it being taken into account for inheritance tax<\/a> purposes, as long as some simple rules are followed.<\/p>\n\n\n\n

Broadly, these come under two headings:<\/p>\n\n\n\n

    \n
  1. gifts where the allowance is automatic (if the gift fits the rules); and<\/li>\n\n\n\n
  2. those where the exemption must be claimed after death (such as gifts out of surplus income).<\/li>\n<\/ol>\n\n\n\n

    The automatic allowances include gifts to charities or political parties, gifts on marriage or civil ceremony, an annual exemption of \u00a33,000, and small gifts up to \u00a3250 per person.<\/p>\n\n\n\n

    Any number of so-called small gifts<\/strong> can be made each year, of up to \u00a3250 per recipient, with no limit on the number of recipients, as long as no one person receives more than \u00a3250. If anyone receives more than \u00a3250, then the whole small gift exemption in relation to that recipient is lost for the year, not just the excess.<\/p>\n\n\n\n

    Alongside, the annual exemption<\/strong> of \u00a33,000 can be used to make gifts to one or more people. There\u2019s an added benefit if the allowance isn\u2019t fully used in any year, as any remaining allowance can be carried forward one year. It cannot be combined with the small gift exemption for any one individual.<\/p>\n\n\n\n

    In any tax year, you can also give a cash gift when a friend or family gets married or has a civil ceremony. The limit is \u00a35,000 for a child and \u00a32,500 for a grandchild, or \u00a31,000 for those outside immediate family, whether a friend, niece or cousin.<\/p>\n\n\n\n

    You can also make payments to help with another person\u2019s living costs, such as an older relative or a child under 18.<\/p>\n\n\n\n

    And if giving to charity is important to you at Christmas, it\u2019s worth knowing that gifts to charities and political parties will not count towards the total taxable value of your estate. You can also cut the Inheritance Tax rate on the rest of your estate from 40% to 36%, if you leave at least 10% of your ‘net estate’ to a charity.<\/p>\n\n\n\n

    Wills and trusts expert James McMullan<\/a> said:<\/p>\n\n\n\n

    \n

    \u201cThese allowances are automatic, unlike the gifts from surplus income, but even so, it\u2019s a good idea to track any gifts as it will help to ensure that you keep inside the rules, and makes it easier in any later dealings with HMRC<\/a>.\u201d<\/p>\n<\/blockquote>\n\n\n\n

    When it comes to relief on gifts from surplus income, record-keeping is essential as the gift will only qualify for exemption if it is part of a regular pattern of giving and if you can demonstrate that you maintained your normal standard of living after making the gifts and all other usual expenditures.<\/p>\n\n\n\n

    James added:<\/p>\n\n\n\n

    \n

    \u201cTo make gifts from surplus income, it\u2019s essential you record your intention in writing, setting out that you mean to make the gifts regularly, and then keep a record of income and outgoings to demonstrate the money you gave was indeed out of surplus income. It doesn\u2019t need to be too complicated, just a simple log of your income received during the year and the amount spent, figures which could come from monthly and annual summaries on bank account statements.\u201d<\/p>\n<\/blockquote>\n\n\n\n

    The exemption for gifts from surplus income must be claimed after death by the executors of a person\u2019s will and can be used for any regular payments, such as monthly contributions to a grandchild\u2019s savings account or payment of school fees, or making regular gifts on special occasions such as birthdays and Christmas.<\/p>\n\n\n\n

    Any other gifts made, unless they go into a trust, will be \u201cpotentially exempt transfers\u201d known as PETs) which becomes exempt if you survive the making of the gift by seven years. Otherwise, the value will be brought into account for inheritance tax purposes.<\/p>\n\n\n\n

    James said:<\/p>\n\n\n\n

    \n

    \u201cMaking \u201cgifting\u201d part of an annual review is a good idea, as the rules do change from time to time. It\u2019s good practice to check back what you\u2019ve done each year, just as it\u2019s important to keep your will up to date as circumstances change.<\/p>\n\n\n\n

    And remember, if you\u2019ve run out of gift ideas for your spouse or civil partner, it\u2019s worth remembering that you can give them as much as you like during your lifetime, as long as they are living permanently in the UK.\u201d<\/p>\n<\/blockquote>\n\n\n\n

    Speak to private client solicitor James McMullan<\/a> today.<\/strong> <\/p>\n\n\n\n

    Note: This article is not legal advice; it provides information of general interest about current legal issues.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

    Christmas shopping usually means a visit to the high street or browsing online retailers, but the season of giving can be a good time to make sure you\u2019re maximising your opportunities for inheritance tax reliefs<\/a>, whether to family, friends or charity, while spreading some seasonal cheer.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[9],"tags":[26,11,28,29],"class_list":["post-3751","post","type-post","status-publish","format-standard","hentry","category-news-story","tag-private-client","tag-tax","tag-tax-and-trusts","tag-wills"],"acf":[],"yoast_head":"\nGifts gifts from surplus income at Christmas | RIAA Barker Gillette UK<\/title>\n<meta name=\"description\" content=\"Christmas can be a good 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