Lifetime Gifts at Christmas

Christmas Gifting

Spread a little happiness this Christmas with Lifetime Gifts

Lifetime Gifts at ChristmasWhile most Christmas presents will be forgotten almost as soon as the wrapping hits the floor, there is a festive gift that will make a real difference in the lives of your loved ones right now – and potentially in years to come.

While we help people to write their Wills and Estate Plans, we also often advise on Lifetime Gifts – substantial financial gifts to friends and family. As well as helping out family members who need it, wise use of Lifetime Gifts can also reduce your family’s exposure to Inheritance Tax in years to come.

Large Gifts

You can give gifts of over £250 up to a cumulative total of £3000 within any tax year and those gifts will no longer be counted as part of your assets for tax purposes. You can give gifts totalling more than £3000, but those will be counted as part of your estate, should you pass away within the following seven years.

To find out exactly how this works, see our previous article: The 7 Year Rule – Inheritance Tax and Lifetime Gifts.

Lots of little presents!

You can give as many gifts of up to £250 as you like! Merry Christmas!

Gifts for Special Occasions

There are a few types of larger gifts that are exempted from continued tax liabilities, including gifts given on marriage, and donations to charities or political parties.

So if a member of your family is getting married and you’d like to help with the costs of the wedding, or contribute to a deposit on a new home, or simply a cash gift to set them off on their new life together, you could make this a Christmas gift to really remember.

Gifts without strings

For something you give to qualify as a gift, it must be given freely and without conditions. You cannot continue to derive any benefit from the gift (ie, signing the house over to your adult children, but continuing to live there rent free).

Gifting or Trusts?

Even if you are confident in giving large gifts that you will likely survive another seven years – or have an insurance policy in place to protect your family from IHT liability if you don’t – be aware that gifts given to your adult children or grandchildren can be claimed in the event of a divorce, or become joint property of a future spouse should your descendants marry or remarry.

If you would like to ringfence your gifts for specific family members and protect them against changes in circumstance, then you may want to consider setting up a trust, rather than giving a direct gift. This can also help to protect your family from Will challenges and tax liabilities.

For more information on Trusts, when they are appropriate and what they can be set up for, please do read our free guide, ‘What is a Trust, and How Will it Protect Your Loved Ones’.

Whatever you decide to give, we hope you enjoy a very Merry Christmas, and a prosperous and peaceful New Year. Here’s to the future!

 

For more information get in touch with us at Just Wills and Legal Services on 01342 477102 to book a free consultation.

This article is for general information only and does not constitute legal advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.



Get in touch

Book your free 20 minute consultation with an expert either by video or phone call now

    * Indicates a required field

    Are you contacting us about an existing Will or Product we hold / manage?
    I agree. Sign up for news, advice and guides from Just Wills & Legal Services to help plan your Estate and look after the ones you love. You can opt out at any time and we will never spam you – read our Privacy Policy

    We promise not to share your details with third parties and only contact you with the information you have requested. By submitting this form you agree to receive this information via email. To learn more about our how we deal with your information, take a look at our Privacy Policy