Giving money to family members

[Thingsthatgo]

I often read on here about parents paying for their child’s deposit for a house, or giving them large amounts of money. In the comments people will often point out about inheritance tax, and the problem if the person giving the money dies within a certain number of years.
I was under the impression that there is a limit on the amount of money anyone can give away, without certain tax implications. My auntie gave me some money, but it had smaller amounts over a few years, to avoid any problems, and my dad has said that he will be doing the same.
AIBU to think that parents/relatives can’t just give away large amounts of money?

They can to their children-it’s slightly different rules. There is no limit on amount but you pay tax on anything over £3k per year IF they die within 7 years of the gift.

People can give money (as in cash gifts rather than, eg, shares) as they want. IHT rules only kick in if the person giving the cash dies within 7 years of the gift.

You can give as much as you want provided you don't die within 7 years.

Otherwise you can give £3k plus I think unlimited £250s to different people provided it is out of excess income. Also £10k to your child on marriage.

I've heard the 3k a year max thing too.

Going off on a tangent (hope you don't mind op) does anyone know if the same applies for paying for things instead of cash gifts. My father has very kindly offered to help us pay for ivf if we need it. That's going to be well over 3k so does that mean if he dies within 7 years (obviously hopefully not) I'd have to pay the tax on it? I guess maybe if he pays the clinic directly instead that might be ok?

Have a look on Gov.uk lifetime gifts. Here's a snap on exempted gifts.

It's worth remembering that it's not usually the individual who receives the gift who is liable. It's the estate.

"Usually it is the estate which is liable for IHT. However if you are the recipient of a gift, and the giver has died within 7 years, and has already given away more than £325,000, you could be liable to pay IHT yourself."

But how would anyone know? Big amounts are traceable but how is anyone going to know if I took £500 out of the bank and handed it too whomever? I know parents who give regular amounts of money to their adult kids and if it’s not declared then 7 years or not the tax man won’t know anything.

www.gov.uk/inheritance-tax

The thing that's not mentioned on HMRC's web site (at least the page I've just looked at) is that "gifts out of surplus income" are also exempt.

If you have enough income to maintain your usual standard of living, you can make gifts from your surplus income. For example, regularly paying into your child’s savings account, or paying a life insurance premium for your spouse or civil partner.

To make use of this exemption, it’s very important that you keep very good records of these gifts.

Otherwise, Inheritance Tax might be due on these gifts when you die.

The rules for this exemption are complex - for example, these gifts must be regular, so you need to be committed to keeping up with making these gifts.

It’s best to speak to a legal or estate tax adviser first if you want to use this exemption.

Grandparents can also use it to pay for things like their grandchildren’s school fees.

www.moneyadviceservice.org.uk/en/articles/gifts-and-exemptions-from-inheritance-tax

Thanks everyone.