Tax Advice: Gifts out of income and IHT
05 Dec 2018
Those thinking about making gifts at Christmas should take advantage of the various inheritance tax (IHT) exemptions and reliefs available. There are also certain gifts which have capital gains tax (CGT) implications too.
In this series of articles, brought to you by Beavis Morgan, we look at the various options available to you.
Gifts out of income are not taken into account for IHT
A more generous inheritance tax exemption applies where the donor can prove that he or she is not transferring capital, but is making gifts out of their income.
There are detailed conditions for this exemption to apply requiring records to be kept of income and expenditure in order to prove that there is sufficient surplus income each year to make regular gifts to the beneficiaries.
Our tax specialists at Beavis Morgan are available to assist you in keeping the necessary records to satisfy HM Revenue & Customs.
Other articles in the series:
The IHT annual exemption – use it or lose it!