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| *Loan,banking and credit>>>child tax |
My Father has inherited some money, How much can he give to his children before tax is paid.? |
This may sound a bit mercanary but it was Him who asked me to find out. 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... 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 拢300k before IHT kicks in. If IHT becomes an issue, then the 2007/08 total annual gifts exemption is 拢3,000 (plus any unused relief brought forward from 2006/07). In addition, lifetime gifts not exceeding 拢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 拢250 in the same tax year. Source(s): Qualified accountant with own tax practice for 30+ years. I think its $9,999.99 Anything over $10,000 is usually suspicious, and may be taxed. Not 100%, but pretty sure. I think he can give away 拢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. Just give me the tax. 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. 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! |
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