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Original poster

Gifting kids (some) house deposit

58 replies

Marylou62 · 30/01/2022 09:39

My DH is about to get £15,000 from a pension..He wants to give our 3 DC £5,000 each to go towards their future houses..2 DC are hoping to buy this spring..
Discussing it with a close friend she said she thought you could only give/gift £3.000 a year without tax implications..
Any advice please..

OP posts:

Mumofboys1 · 30/01/2022 09:45

I don’t have any advice, and I’m sure someone with lots of knowledge will be here soon to offer advice but I also thought there was something about a £3k rule.

LIZS · 30/01/2022 09:46

There are specific amounts for specific purposes ie. Wedding gift. Iirc £3k is annual gift amount. All that happen if above the threshold is that they are treated as part of estate for tax purposes should giver due within seven years.

www.gov.uk/inheritance-tax/gifts

Abra1d1 · 30/01/2022 09:48

That's an inheritance tax limit: £3,000. If you give away a gift of £3,000 in one tax year your estate isn't liable for IHT if you die.

I believe you can backdate one year as well, so you could give away two lots of £3,000. But worth checking.

If you gave away more than £3,000 and didn't die for seven years after, the payments wouldn't be liable for IHT anyway.

Chasingsquirrels · 30/01/2022 09:49

It is to do with inheritance tax www.gov.uk/inheritance-tax/gifts see the annual exemption bit.

Assuming you haven't used last year's allowance, he can gift half to you (no tax issues as married) and you each gift the kids. That gives you £12k exempt. Do the other £3k after 6 April in the 2022/23 tax year.

Original poster

Marylou62 · 30/01/2022 09:55

Who knew how complicated it would be to do a nice thing!...Thanks everyone.. Just telling him now...

OP posts:

Firefliess · 30/01/2022 09:59

It's not complicated at all at long as DH doesn't die in the next 7 years (and even then only matters if the two of you between you have over the inheritance tax threshold in assets - about £1m currently for a couple including the house value). You don't need to do anything to report a gift at the time.

Enjoy being able to help your kids out now while you're alive to be appreciated for it!

Original poster

Marylou62 · 30/01/2022 10:00

So no way to give the kids £5000 each?

OP posts:

Chasingsquirrels · 30/01/2022 10:01

It's not really complicated at all.

The only potential tax implications come if the giftor dies within 7 years of making the gift (if the gift isn't covered by exemptions - which as mentioned above you can easily sort).

Oblomov22 · 30/01/2022 10:02

We are doing similar. Just transfer it. It's unlikely to be an issue.

Kitkat151 · 30/01/2022 10:02

There’s no inheritance tax to pay if the value of your estate is less than 325k ( so 650 for the two of you)

rainbowandglitter · 30/01/2022 10:03

@Marylou62

So no way to give the kids £5000 each?

Yes you can. Everyone here has said. If you die within 7 years then it affects IHT.

Kitkat151 · 30/01/2022 10:03

@Marylou62

So no way to give the kids £5000 each?

How much is your house worth?

Chasingsquirrels · 30/01/2022 10:04

@Marylou62

So no way to give the kids £5000 each?

Yes, as explained in my post above.

He gives £6k to you (spousal exemption).
Both of you gift the kids £2k each now (so you are each giving £6k, covered by 2021/22 + 2020/21 bf annual exemptions - assuming 2020/21 not used).
He gifts each kid £1,000 after 6 April (uses 2022/23 annual exemption)

gogohm · 30/01/2022 10:05

You can give it to them, but if he dies in the next 7 years there's inheritance tax implications. You can give away everything if you want there's no actual limit!

Chasingsquirrels · 30/01/2022 10:06

Or as others say just gift it and ignore the potential consequences on the assumption he'll live fir 7 years and the total estate won't be above the IHT thresholds.

But why risk that when utilising the exemptions is so easy.

Original poster

Marylou62 · 30/01/2022 10:08

Sorry..trying to keep up.. My DH is in poor health so the 7 year rule is a worry. We part own a house (HA) with about £50,000 being our share of worth. We have £31,000 in savings.

OP posts:

ThelastRolo20 · 30/01/2022 10:08

As someone else said it's only liable for inheritance tax if your DH passes away within 7 years of the gift being given. We were gifted money (more than £5k) and didn't have any charges. For a house purchase there will just need to be an accompanying letter explaining it's a gift and you're not going to have an interest in the property.

h0rsewithn0name · 30/01/2022 10:08

@chasingsquirrels has it spot on, we did this.

To keep our records tidy, I wrote a letter to each child explaining that I was giving them each a sum for last year and this year combined. Then the next tax year I did the same. DH did the same as me, as they were marital assets.

In your situation I'd recommend that you gift one child £2,500 for both last year and this year. Your DH could gift the same amount to the next child. Then in April you both gift £2,500 each to the third child. They are all marital assets anyway, so no problem.

Original poster

Marylou62 · 30/01/2022 10:11

Thanks everyone.. We will be doing what is recommended..

OP posts:

TheFlis12345 · 30/01/2022 10:12

It sounds like your estate is below the inheritance tax threshold anyway so those rules won’t apply to you.

MadeForThis · 30/01/2022 10:12

Inheritance tax won't apply to his estate so he can give as much as he wants.

Original poster

Marylou62 · 30/01/2022 10:13

And lets hope the pension company actually pays out before April 5th!!!
It's been a 2 year saga!

OP posts:

Chasingsquirrels · 30/01/2022 10:14

@Marylou62

Sorry..trying to keep up.. My DH is in poor health so the 7 year rule is a worry. We part own a house (HA) with about £50,000 being our share of worth. We have £31,000 in savings.

On these figures you have no IHT issues, under current legislation. I'd still follow my plan (above) as while extremely unlike to affect you at these levels, tax regimes are subject to change.

Firefliess · 30/01/2022 10:14

Sounds like you have nowhere near enough assets to be worrying about inheritance tax. So DH can just give them each £5k without about concerns.

Original poster

Marylou62 · 30/01/2022 10:15

Glad I asked on here..Thankyou to all who has given me advice.
I feel just like I did when my maths teacher tried to explain things! Maths not being my strong point...I make amazing chocolate cakes and christening gowns tho!

OP posts:

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