Hello Justin! Thanks so much for the video! :) Can I ask if a "gift letter" is necessary when someone gifts some savings to their children or grandchildren?
Hi Joseph, I would recommend it is important to keep proper records of any payments. A simple letter confirming the nature of any payment, i.e. a loan, an advance, or an outright gift, will usually suffice. If any payment is to be deducted from an entitlement under a Will then a codicil or a new Will should be made.
Thanks for the informative video Justin, If my mother were to give me half of her house, and I charged her a market value rent to live in my half of the house, so it is not a Gift with reservation of benefits, what supporting documentation would I need to prove this to HMRC in the event of her death ? I intend to pay 50% of the household bills also (I wouldn't intend to live there with her, at least not full time, is this an issue ?)
Hold on a minute! My grandma (abroad) gifted me a plot of land back in 2012 but never declared it in UK as I never thought I had to :/ so ... will I be fined if I declare it now? will I get charged / taxed? Btw, my grandma is still alive. The plot is due for a sale in next 1 - 2 years. value over 100K of Euros. Planning to buy a property with that money. Now unsure how to proceed.
My mum and dad owned their home as tenants in common, my sister had financial problems, so my father took out a life time mortgage and gave us £50000 each five years ago.last October both parents had to go into full time care due to dementia, my Mother Passed last week and the mortgage company has given us 12 months to sell the house and repay £135000, the house was valued at £425000, we have to sell the house to pay the mortgage and dad's care home fees, is this a tax nightmare??
One thing is very difficult to find in print is the fact that as well as gifting the tax free money over and beyond the NRB tax free if you survive over seven years you also,when you die,gain another £325,000 NRB after death. Can anyone confirm and ,perhaps,point to this in black and white somewhere.It’s the elephant in the room no one talks about.- or am I completely wrong about this?
Hi Michael, this might help? www.gov.uk/inheritance-tax/gifts " The 7 year rule No tax is due on any gifts you give if you live for 7 years after giving them - unless the gift is part of a trust. This is known as the 7 year rule."
Can you confirm that if you survive longer than 7 years that you effectively gain the use of another NRB of £325,000 after death.This another chunk of tax saved- £130,000. I read HMRC but I find it not explicit enough. I probably still don’t understand this after a week of studying the subject.
@@TheRetirementCafe For example,if I gifted £325,000 over 7 years before I died this is tax free, then when I eventually died I believe I would still have the tax free NRB of £325,000?
Hello Justin! Thanks so much for the video! :)
Can I ask if a "gift letter" is necessary when someone gifts some savings to their children or grandchildren?
Hi Joseph, I would recommend it is important to keep proper records of any payments. A simple letter confirming the nature of any payment, i.e. a loan, an advance, or an outright gift, will usually suffice. If any payment is to be deducted from an entitlement under a Will then a codicil or a new Will should be made.
Brilliantly clear and very helpful
Great video as always Justin! 👍
Would love to know more on the option to insure gifts!
Thanks John, will look to cover that in a video.
Thanks for the informative video Justin, If my mother were to give me half of her house, and I charged her a market value rent to live in my half of the house, so it is not a Gift with reservation of benefits, what supporting documentation would I need to prove this to HMRC in the event of her death ? I intend to pay 50% of the household bills also (I wouldn't intend to live there with her, at least not full time, is this an issue ?)
did you get the reply for this? it is a good maths question.
Hold on a minute! My grandma (abroad) gifted me a plot of land back in 2012 but never declared it in UK as I never thought I had to :/ so ... will I be fined if I declare it now? will I get charged / taxed? Btw, my grandma is still alive. The plot is due for a sale in next 1 - 2 years. value over 100K of Euros.
Planning to buy a property with that money.
Now unsure how to proceed.
Does the seven-year rule operate in tax years, or is it exactly from the date of the gift?
Date of gift
@@TheRetirementCafe , thanks !
My mum and dad owned their home as tenants in common, my sister had financial problems, so my father took out a life time mortgage and gave us £50000 each five years ago.last October both parents had to go into full time care due to dementia, my
Mother Passed last week and the mortgage company has given us 12 months to sell the house and repay £135000, the house was valued at £425000, we have to sell the house to pay the mortgage and dad's care home fees, is this a tax nightmare??
One thing is very difficult to find in print is the fact that as well as gifting the tax free money over and beyond the NRB tax free if you survive over seven years you also,when you die,gain another £325,000 NRB after death.
Can anyone confirm and ,perhaps,point to this in black and white somewhere.It’s the elephant in the room no one talks about.- or am I completely wrong about this?
Hi Michael, this might help? www.gov.uk/inheritance-tax/gifts " The 7 year rule
No tax is due on any gifts you give if you live for 7 years after giving them - unless the gift is part of a trust. This is known as the 7 year rule."
Can you confirm that if you survive longer than 7 years that you effectively gain the use of another NRB of £325,000 after death.This another chunk of tax saved- £130,000.
I read HMRC but I find it not explicit enough.
I probably still don’t understand this after a week of studying the subject.
@@TheRetirementCafe
For example,if I gifted £325,000 over 7 years before I died this is tax free, then when I eventually died I believe I would still have the tax free NRB of £325,000?
@@michaelhall2138 yes, though you could also give £10million and survive 7 years and have your £325k allowance when you die.
Gift of what? Cash? Property? Holiday cottage?
Anything. Though there many be tax due on the transfer of ownership such as Capital gains tax or stamp duty.