Large gifts to adult DC - what's enough?

[Loadedbydeath]

Disclaimer: yes, we have spare money. No we're not stealth or otherwise boasting. Yes it's sad that a lot of people are struggling and we've given money there too.
But wondering how much, proportionately, it's reasonable to give adult DC under the 300k each and no tax if you survive 7 years. So far they've had between them about a third of what we have spare. DH is also leaving DS1 the bulk of his dc pension pot when he goes. There's a small trust for disabled DS2 from gran which leaves him mortgage/rent free.

But we both have reasonable pensions and no mortgage. Most people (85pc) don't actually ever need care costs so saving just for that seems OTT. In principle I could give them the same again and still have enough for a decent but not extravagant retirement. So, give the most possible now, or through inheritance?

We're not practically disagreeing but DH cares less what other people do than I do. Conscious some of our friends are pretty much ladling the lot out now and trusting to the family home to cover costs if needed.

Also conscious of the prevailing "greedy selfish rich boomers" discourse and that kids secretly think this: they've been grateful but not effusive, do you that's because they think badly of us? We actually offered more but they say they're OK. DS1 earns above average, child free. DS2 single.

Read the room.

What's the £300k and no tax thing?

You could start with some financial advice (paid) for starters as jt seems you have a lot of money but a bit vague on the tax details.

Is ds1 married and is the relationship stable?

Some people put it all in trust to avoid issues with children if they divorce.

I'm giving mine away, slow and steady, and am 50. Don't plan to have much left by 70

I think it's fine to be generous towards your adult children, if that's what you want, and you can afford it.

If it's more about the practicalities; tax, inheritance issues, fairness, perhaps ask a lawyer?

Good Luck!

I think it's your money, it's very wise to keep it your money when you cannot see what is around the corner.

I am unimpressed with your offspring that they haven't been effusive in their appreciation for what they have already received.

Have you and DH done all the things you want to do? I know of a couple who went cruising for a year with the money they’ll worked all their lives to enjoy in retirement- both say it was the best thing they ever did.

our current plan is to leave kids money when we die in form of inheritance, will help with some money along the way but intend to keep plenty for me and DH to have fun and travel and enjoy our own lives too. Kids are still in Uni so let’s see how it goes - plans are always open to change!

What? Some people have more
Money than others. That's life.

I think you should make sure you keep enough. If they don't need the money, would it be more satisfying to give it to a cause close to your heart? With that sort of money you could make a real difference. Maybe look into local or small scale charities

Not sure what you mean by 300K? You can give away as much as you like, and live 7 years its inheritance tax free.
I think you can give 3K a year tax free.
Depravation of assets in terms of care fees is a separate issue, there is no limit to the number of years they can look back for care fees (if you end up needing care that is…bit of a gamble relying on the state IMO)

Not sure I know what the 300k and no tax thing is either - do you mean IHT thresholds? I don't think there's a limit on gifts as long as you survive 7 years.

We've taken advice. The 7 year rule has a limit, it's not as much as you like. See HMRC.

FGS do you think MN is only for poor people .

Use the scroll feature

We're not an effusive family tbh, loving but more practical

I hope you didn't pay for that advice

OP your question is worded very oddly.
If you want to avoid inheritance tax with that amount of money you should be able to access professional advice - which you've done. So that can't be your question.

'Enough'? What does that mean?

As a child I certainly don't want the bulk of my parents' money they've worked so hard and deserve all of it. Give it to your DC for a specific purpose e.,g buying a house but if they don't 'need' it, why give it to them?

Also I wouldn't think them ungrateful for not being 'effusive', it's simply that maybe, they would rather you enjoy the fruits of your hard work. Personally if my parent had that much money I don't see what else I can do apart from having them pay my mortgage off. I'm not the sort to live off mummy and daddy's money, I have a good job and earn enough and would feel guilty just taking from them to go on holiday/work PT/other unnecessary thing.

When your DC have children... then yes, it becomes relevant as money makes a lot of opportunities for them easier. Private school, enrichment activities, uni and house deposit money. But an adult doesn't have these needs, only maybe a financial cushion in case of job loss but that's it.

Then I think you’ve misunderstood the advice…

Only via taxes, it's straight from the HMRC in that case. No taper relief after the first 325k

I think you need advice from a solicitor or an independent financial advisor, OP. In other words, someone with qualifications you could pay an hourly rate, who has no incentive to sell you financial products.

My reading on gov.uk did turn up anything about gifting £300K to each DS tax free if you live 7 yrs, though it was quick and I could be wrong. Rather, through 2026 the Inheritance Tax threshold is £325K per person.

What are the parameters of DS2’s disabilities? My concern would be to assure his quality of life as the top priority.

You really need better financial advice than whoever previously advised you. I hope it wasn't the same person who drew up the trust, but if it was, get that double checked

I think you have misunderstood. You have an IHT free allowance of £325k each. If you give that to your children, it will never be liable for inheritance tax, but if you die within 7 years, it will count as part of your estate, so you/they will have to pay inheritance tax on the rest of their inheritance because your nil rate band will have already been used up with this gift (except the residential NRB if you are leaving them your house). You can give however much else you like, and it will pass out of the estate after 7 years if you live that long (benefiting from taper relief along the way).

The major advantage if you want your children to have it anyway is that they can invest that money and they will benefit from the increase in value. If you invest the money, then your estate will get bigger and it will all be taxed. At the moment, capital gains tax is less than IHT so your children will pay less tax if you give them the money now but they should make sure they keep enough accessible to pay the IHT due if you before the 7 years is up.

If you're trying to be as tax-efficient as possible, you could each also give each child £1500 per year to use up your £3000 annual gifting allowance.

I think I’d say whatever you can afford. It would also depend how old you are in my book. If you’ve already recently given them a big chunk then maybe wait another 12-24 months and see if they would like more (towards mortgage/car/wedding/holidays whatever).

I’d love to give generously to my adult kids if I could but it’s really hard to say what is reasonable without knowing specific circumstances.

If your grown dc are capable adults, why not?
Facts are facts. You have spare money. It is sensible to give them it now.

Get a grip.

I wouldn't be gifting too much op, you don't know what is around the corner.

You need to see a proper IFA and / or a solicitor op.

On the care thing, you might not need care but you might need general maintenance. Mil has to have regular scans scopes and consultations costing hundreds at a time. When my dad got sick for him to get a stairlift in was 14000 euro. Then don’t forget your house will fall into disrepair with age, and then there’s funeral costs in the end! Don’t assume you won’t need the money, I saw from my parents that getting old is extremely costly!!

The room says some people have money, some don’t. Grow up.