My Father has inherited some money, How much can he give to his children before tax is paid.?

Question

This may sound a bit mercanary but it was Him who asked me to find out.

Answer 1

You have picked a wonderful subject: Inheritance Tax (IHT). Congratulations!

I was going to write a lengthy piece here as it can be very complicated. However, why reinvent the wheel when HMRC have already done it.

Nip over to the HMRC website http://www.hmrc.gov.uk/cto/customerguide/page6.htm and review the information provided.

To summarise, IHT is only payable on death and the value of lifetime gifts is only taken into consideration if death occurs within 7 years from the date of the gift. Currently (2007/08), an estate must exceed £300k before IHT kicks in.

If IHT becomes an issue, then the 2007/08 total annual gifts exemption is £3,000 (plus any unused relief brought forward from 2006/07).

In addition, lifetime gifts not exceeding £250 in total value made by one individual to another in any one tax year are exempt. It does not matter how many different donees there are, provided each donee is given no more than £250 in the same tax year.

Answer 2

Your best bet is to take 3K and put it in to an ISA and get other family members to do the same. That makes that tax free.
Your father can give you as much as he likes, you will only be taxed if he dies within 7 years of giving you the money. But beware!... If your given a large lump sum and you invest it well, then the interest you earn may take you over your tax threshold and put you in the higher rate.. I would always suggest speaking to a Financial Advisor but do it through a Bank or Building Society as IFA's (Inderpendant Financial Advisors) will take a cut! Good luck!

Answer 3

At worst, an inheritance should be taxed on the capital gains tax cost, that's what your father might want to pay if he bought the farm for better than he paid for it. inspite of the indisputable fact that the authorities will tax it if he leaves it to you at a cost as a lot as fifty 5 p.c. (if its fee exceeds a particular quantity). Warren Buffett, now the international’s second richest guy, says the inheritance tax should be maintained. He says he needs us to be a meritocracy in which all and multiple earns what they get. yet Buffett doesn’t intend to pay one cent in inheritance taxes because he’s leaving each and every thing he has to the bill and Melinda Gates beginning position. What a hypocrite! i imagine the Gates’ beginning position is between the acceptable contained in the international. bill Gates has contributed about $30 billion to it and extra is on the way. It facilitates toddlers global, and does so extra effectively than any authorities-subsidized classes. i imagine the international of bill and Melinda Gates. i can't say an similar about Warren Buffett. To many in authorities, truly liberals who're no longer wealthy, being wealthy ability try to be a criminal. We truly have some crooks on Wall street, yet to take heed to lots of our flesh pressers talk, all and multiple on Wall street is a criminal, such as 1000's of first rate those who've basically misplaced their jobs. the authentic crooks in this u . s . are in Washington, D.C., no longer on Wall street. our flesh pressers thieve our funds to purchase our votes. they are the devil's own disciples.

Answer 4

Your father can give as much as he likes to anyone without paying tax. There is no tax to pay on gifts.

If he survives for 7 years there will be no liability whatsover but should he die within that period and leave an estate which - after deduction and gifts - might exceed the limit [currently about £300000] for IHT his estate may have to pay tax.

But - perhaps sadly - that by then will be of no consequence to your father

Answer 5

He can get a 'Variation' on the Will = this allows the money to go them direct & is used a lot to minimise death duties on Property (by using first death Inheritance Tax band to absorb part of the value by passing on part of the house direct to the kids instead automatically leaving it all to the surviving partner)

Answer 6

I think he can give away £3000 each year all together .If he gives away over that, then if he dies within 7 years inheritance tax will need to be paid.

Answer 7

Depends on which country you live in.

If in the UK it might pay you to read the publication 'WHICH guide to wills and Probate' that sets out the possibilities.

Don't rely on barrack room lawyers on this as it may cost you later on especially at a time of difficulty.

Answer 8

It was HE not him.

the answer is two thousand pounds, before the donor has to pay gift tax.
On receiving the gift the the donee is liable for any income earned on the gift; this amount varies, depending on what is done with the money.

Cheers.
d.

Answer 9

Just give me the tax.

Answer 10

More info required.
Are they his infant children?
Are you referring to IHT or Income Tax?
(And I've checked with God and he DIDN'T ask you to find out)