milo

i could have sworn ive seen this asked on here before, but couldnt find it with a search.

what is the maximum you're allowed to gift to someone not related to u without them getting hit for tax?

PCatWork

I think you can give as much as you want, but if the giver dies within a certain period of time, the receiver can suffer inheritance tax. Just what I remember someone else telling me so it could be wrong. Have a look here:

http://www.inlandrevenue.gov.uk/pdfs/iht3.htm

milo

thanks!

if unlimited gifts are allowed, whats to stop someone who's getting sued, or going thru a divorce, or whatever, gifting a whole lot of money to a 3rd party to avoid it being able to be considered in any settlement?

PCatWork

Well it does happen. Basically the other party's lawyers then argue that the gifted cash or assets are "held on trust" for the original owner, and should therefore be included in any settlement.

Don't ask how I know.

Tiggs

give as much as you like but if you die with the seven following years the amount you gave away is deducted from your nil rate band for calculation of IHT. This will cause more IHT on the estate but wont effect the person that got the gift unless the total of gifts is over the nil band of £263k....in which case there is no nil band left and that gift is taxed as well- although that element will taper over the 7 years.

milo

nice one guys, thanks