small gift clarification

Hi Malburian1959,

HMRC cannot comment on the findings or advice from other websites.

For payments being made we refer to a tax year, that is 6 April to 5 April, so any payments made within that tax year would need to be within limits specified.

Thank you.

Hi Marlburian1959,
HMRC cannot comment on the findings/advice from other websites.
For payments being made we refer to a tax year - 6 April to 5 April so any payments made within that tax year would need to be within limits specified.
Thank you. 

Hi HMRC, I have a few questions regarding the yearly gifts allowances of £3000. 1) Does it count into the allowance limit or inheritance tax if I bought presents for a friend in the UK using money from my oversea account? 2) If I have gone over the yearly £3000 allowance limit of giving gifts to mutiple people (which I think I might have), do I need to tell HMRC or just keep track of the gifts in case I passed away in the next 7 years? 3) If I regularly send money to a friend to help him with living expenses, do these expenditure considered tax exempt? Thank you. Kind regards, Arif Rassip

Hi Arif Rassip

We are unable to answer questions about Inheritance Tax on this forum.
You may wish to direct your question to HMRC's Inheritance Tax helpline  Inheritance Tax: general enquiries

Thank you

This is a very informative thread, but I need some clarification on annual gift allowances, as my elderly parents want to distribute cash gifts to their grandchildren and I fear this may have IHT implications. (i) In current tax year (2023/24) they have gifted £600 (£300 each) in birthday/Christmas gifts. Can they still each gift £3000 (split equally between their grandchildren)? Or does the £600 form part of their £3000 annual gift allowance, thereby leaving £2400 do distribute? (ii)In the previous 2022/23 tax year my parents bought airline tickets for two grandchildren, who live abroad, to visit them in the UK. Does the cost of the airline tickets count as a gift? I have read on some legal threads (not gov.uk) that in this scenario, as my parents were beneficiaries of the visit, the payment does not impact on the £3000 annual allowance. I'm unable to find any clear 'rules' on this on the HMRC website, so any clarification would be appreciated. (iii) Finally, can any surplus in the 2022/23 tax year annual gift allowance be carried over/added to the allowance for the current tax year

Hi Frankie22,
Please have a look at the guidance on gifts and examples at How Inheritance Tax works: thresholds, rules and allowances.  
£3000 can be gifted to one person or it can be divided between several people in a tax year.  
Birthday or Christmas gifts you give from your regular income are exempt from Inheritance Tax.  
You can carry any unused annual exemption forward to the next tax year - but only for one tax year.
Thank you.
 

Thank you for the clarifications and the the link. Can you advise on my query (ii) above, as this is not covered in the information in the link provided. Thank you.

Can you please advise on my query (ii) above. (the answer is not covered in the information in the link provided by HMRC Admin 20). Thank you.

Hi Frankie22,
A gift can be anything that has a value, such as money, property, possessions. as the airline tickets have a value, this would be a gift.
Thank you.

Possibly a dumb question, but does the £3000 maximum allowance apply to the regular £250 small gifts? In other words, if I gave 13 gifts of £250 from my income in one year, would the last one not be exempt from tax?

Hi Roger19,
The £3000 limit is only for Inheritance Tax purposes by which these are not taken into account in the value of the estate when someone dies.
If you exceed the limit then it is taken into account if you die within 7 years of the gift being made.
Tax would then only be due if the total estate ecxceed the Inheritance Tax threshold - currently £325,000.
Thank you. 

Thank you for the information and the quick response. So for absolute clarity: In a case where the IHT threshold is exceeded, and regular gifts of £250 are made to a dependant out of surplus income, which exceed £3000 per annum in the seven years before death, the rule is that IHT would be payable on the amounts over £3000. Have I got that right please? (I don't usually!).

Hi Roger19,
The income would be taken into account for IHT purposes, whether tax is due or not depends on the total value of the estate.
Thank you.

Hello ....can you confirm I can give as many gifts of £400 to my son as long as it is from my regular income and that I do not give him the £3000 iht allowance as well thanks

Hi,
Please have a look at the guidance at How Inheritance Tax works: thresholds, rules and allowances.  The section on making regular payments may help.
Thank you.

I am confused about ‘Annual exception’ and ‘Small gift allowance’ Annual exemption You can give away a total of £3,000 worth of gifts each tax year without them being added to the value of your estate. This is known as your ‘annual exemption’. Small gift allowance You can give as many gifts of up to £250 per person as you want each tax year, as long as you have not used another allowance on the same person. If I give a total of £3,000 [Annual exemption] to ‘n’ people in a given tax year, can I then give up to £250 per person [Small gift allowence] to the same ‘n’ people in the same tax year

Small gift allowance Quote :"You can give as many gifts of up to £250 per person as you want each tax year, as long as you have not used another allowance on the same person." Does"another allowance" mean or could mean the £3,000 "annual exemption"???

Hi queries,
please refer to How Inheritance Tax works: thresholds, rules and allowances or telephone the Inheritance tax line on 0300 123 1072.
Thank you.

Hi queries,
Yes it does.
Thank you.