TAX-FREE GIFTS TO FAMILY MEMBERS

Are you a parent, grandparent, or godparent? Do you make use of your annual gift exemption? If you answered ‘yes’ to the first question you should also consider doing the second as a good way of Estate planning for Inheritance Tax purposes.

WHAT IS THE ANNUAL GIFT EXEMPTION?

Everyone is entitled to give away assets or cash up to a value of £3,000 annually without it being added to the total value of their estate for Inheritance Tax purposes. Any unused part of the exemption can also be carried forward for one tax year.

Parents can gift up to £3,000 tax-free per year to help towards a house deposit, renovations, or as a gift to a new grandchild, for example. Remember that this is your personal allowance, so you cannot give each of your children £3,000. You would need to split the annual exemption between your children if