UK Tax

UK Tax Questions? Ask a UK Tax Advisor for answers ASAP

Ask an Expert,
Get an Answer ASAP!

UK Tax
This answer was rated:

How much can I gift to my children each year and I also want

to buy Income onds in...
How much can I gift to my children each year and I also want to buy Income onds in both our name but I get the intrest and pay the tax on the amount I receive, but on my death the bonds go to my children is this ok
Show More
Show Less
Ask Your Own UK Tax Question
Answered in 14 minutes by:
7/15/2010
Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 14,037
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
Verified
Hi

Thanks for your question

You can gift as much as you like to your children - but whether it needs to be considered for Inheritance tax may be the issue here.

This being the case - any gifts you make each tax year which total £3000 or less are exempt from Inheritance tax (and if for the proceeding tax year you gifted nothing - this can be raised to £6000 and then reverts back to £3000 for the following year)

If you gift more than a total of £3000 then you have to consider Inheritance tax. The gift at the time of being made is potentially exempt but is dependent on the you surviving more than 7 years for it not to be added back into your estate, if you survive less than 4 years - then 100% of the gift is added back in - and if your survive between 4 and 7 years then just a % is added back into the estate.

There are exceptions for wedding gifts when the amount is raised to £5000

As far as the Income Bonds are concerned - these are treated as your income for minors and you will have a tax liability on any income arising usually if the interest is in excess of £1000 a year.
Premium bonds are tax free (and have to be held in the adults name until the child reaches 16) but are treated as the child's income but you may want to consider Children's Bonus bonds that are tax free for you both -
But is all instances these need to be transferred to the child when they turn 16 unless your death comes first.

Thanks

Sam
Ask Your Own UK Tax Question
Customer reply replied 7 years ago
Sorry that is not the answe that I want. My children are married one aged 32 the other 30 and living with partner,it's just I lost my hiusband 3 years ago aged 58 and I want to pass all I have onto my children without having to pay the heavy tax if possible, I want to do everything legal and put my affairs in order well in advance before I die hopefully not for many years to come. The ba nk want s me to buy bonds locked for 5 years, but I get nothing for leaving my money in the bank at the moment that is why I though about Income Bonds as I would get an income or Premium Bonds but no one can tell me what to do there, I don't want my kids left with any probllems with tax after I have gone and want to do tghe right thing
Customer reply replied 7 years ago
Sorry that is not the answe that I want. My children are married one aged 32 the other 30 and living with partner,it's just I lost my husband 3 years ago aged 58 and I want to pass all I have onto my children without having to pay the heavy tax if possible, I want to do everything legal and put my affairs in order well in advance before I die hopefully not for many years to come. The bank want me to buy bonds locked for 5 years, but I get nothing for leaving my money in the bank at the moment that is why I though about Income Bonds in joint names as I would get an income, and i pay the tax on them or Premium Bonds but no one can tell me what to do there, I don't want my kids left with any problems with tax after I have gone and want to do tghe right thing
Hi

Thanks for your response

If the bonds are in yours and your child's name you will be treated as the income being both of yours - as they are above the age of being minors and therefore liable on their share of any income that arises from this investment.

Your best bet with careful planning is to gift them a lump sum now and as long as your survive more than 7 years - will have this disregarded for IHT purposes.

If you gift them your home - and then pay them rent )market value) so you do not attract pre owned asset tax (this arises when you gift something and still benefit from it - an annual tax charge arises)
But then they will have capital gains tax to pay after your death should the property be sold.

You really need to take advantage of a financial adviser rather than a tax adviser, as its about making this work for you now, and for your remaining future, as well as your children's future - all the while minimising IHT and tax liability without leaving you without sufficient funds now.
Trusts are another option - you can consider, but again you would need a financial adviser to guide you on these

Thanks

Sam
Ask Your Own UK Tax Question
Customer reply replied 7 years ago
Thank you for that, my last question was, when i asked about Income Bonds in both name at the office of NSanI they told me that as long as one person pays the full amount of tax "myself" on death the bonds goes to the other name and they pay tax on what they earn from it, have I got it wrong as maybe they though I was talking ab out children. After my husband passed away I want to leave everything ok for them. Thank you
Hi

Thanks for your response

If the Income bonds are in joint names - then the bond passes to the surviver but then has to stay for the duration of the bond until maturity or the death of the second person.
Cash in prior to this will lead to a tax implication - so do consider this before tying money up with them.
But the bond which usually has an investment period for at least 5 years - pays out income of between 2 and 5% - as the investment is deemed to be the joint property of all holders.

If the children are minors then the advise you were given applies - but these are not minors

Thanks

Sam





Ask Your Own UK Tax Question
Customer reply replied 7 years ago
Sorry Sam, \It is not bonds that are locked for years, that is what the banks want. The bonds Imean are income bonds that you buy like Premium bonds, premium bonds stay as they are and the income bonds you make money from each month and can cash in after 6 months just like premium bonds, they are bought from National Saving and Investments Blackpool, look them up sthey do seem very good,as you get an income each month and can cash in at anytime for the investment that was put in an no penalties. If Ii were to put in say £50 in both my and my sons name I would get back each £195.83 before tax, this is the bond that I am talking about, for if I the the tax on the income bond surly that should be enough and then when I die the income bonds goes into my sons name as they will be jointly held?
Hi

Thanks for you response

I can tell you how income is taxed but do not know the full and final workings of the bonds themselves ! Thats why I recommend a financial adviser (and see several all of which are independent!)

But I have had a look at the Income bonds you mean and I can see the one you refer to - but putting these in joint names is going to be treated as joint income - Form 17 from HMRC allows an election to be made with spouses/civil partners when the ownership split differs from 50/50 but there is no form for other relationship shared investments - so I would advise that you need to ensure that a declaration is made for you and each of the children's tax offices advising how the income of interest is split and that the investments are made by you - that way you will be taxed on the full interest

Thanks

Sam


However these are still going to be treated as joint property if in joint names
Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 14,037
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
Verified
Sam and 87 other UK Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 7 years ago

 

 

 

 

 

 

 

 

Ask Sam Your Own Question
Sam
Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 14,037
14,037 Satisfied Customers
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax

Sam is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Sam

Sam

Accountant

14,037 satisfied customers

26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax

bigduckontax

bigduckontax

Accountant

871 satisfied customers

FCCA FCMA CGMA ACIS

TEAP007

TEAP007

Tax Preparer

759 satisfied customers

Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years

Andrew Baker(baktax)

Andrew Baker(baktax)

Personal Tax Adviser

756 satisfied customers

35+ years experience in income tax, CGT, non-residence

berduchwal

berduchwal

Accountant

669 satisfied customers

Qualified accountant and bookkeeper running my own practice since 2008.

Clare

Clare

Solicitor

148 satisfied customers

25 years exeperience as a high street solcitor

Mrs-Tax

Mrs-Tax

Tax Adviser

59 satisfied customers

Law Degree, 19 years in UK Tax.

< Previous | Next >

Related UK Tax Questions
I'm trying to figure out why my P60 doesn't account for the
I'm trying to figure out why my P60 doesn't account for the taxes paid when my RSU vest. It seems that they put the full amount of shares vested but they don't surface the almost 54% taxes already pai… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
I've got an interest only buy to let mortgage for £112000 I
I've got an interest only buy to let mortgage for £112000 I was going to put £18000 down it ,which would reduce the monthly to about £220 per month .I currently get £595 per month rent .is it worth in… read more
taxadvisor.uk
taxadvisor.uk
Accountant and Tax Practitioner
Chartered Certified Accountant - FCCA
3,094 satisfied customers
I sold an investment in December 2017 for 100,000 GBP (net
I sold an investment in December 2017 for 100,000 GBP (net sales proceeds) . I bought the investment 15 years ago in 2002 for the total cost of 40,000 GBP I have been working overseas as an expatriate… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
My friend wants to buy annual leave from her work which then
Hi my friend wants to buy annual leave from her work which then is deducted through her wage over 12 months. Will buying annual leave affect her tax credit… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
I'm trying to fill in my Micro Entity accounts and it keeps
Hi I'm trying to fill in my Micro Entity accounts and it keeps coming up shareholders funds must equal net assets. Not really sure why can you help please? … read more
taxadvisor.uk
taxadvisor.uk
Accountant and Tax Practitioner
Chartered Certified Accountant - FCCA
3,094 satisfied customers
Regarding self assessment taxes. I'm a USA and UK citizen
Regarding self assessment taxes. I'm a USA and UK citizen and will need to file USA and UK (self assessment) tax returns. Both countries tax on worldwide income.In the USA I have a retirement account … read more
Sam
Sam
Accountant
14,037 satisfied customers
I am submitting my Micro HMRC accounts first year for
Hi there I am submitting my Micro HMRC accounts first year for company - if I sen you our balance sheet could I have you tell me what box information needs to be filled in. I would be willing to pay o… read more
taxadvisor.uk
taxadvisor.uk
Accountant and Tax Practitioner
Chartered Certified Accountant - FCCA
3,094 satisfied customers
I am the director of our non profit organisation and am not
Hi I am the director of our non profit organisation and am not getting paid at the current date due to raising funds however I put in a lot of hours per week can I claim working tax credits along with… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
A person has dual residence in England and Greece with
A person has dual residence in England and Greece with income in both countries. 1.Do both Incomes have to be declared in the UK? 2.Is there a form which needs to be completed to inform the HMRC in UK… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
In February 1999 I bought my first house. The listed price I
Hi – in February 1999 I bought my first house. The listed price I paid was £30,500 (paid between deposit and mortgage). In June of 2008 I married and in July of that year I quit my job and my wife and… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
My question regards taxation on earnings that I have been
My question regards ***** ***** earnings that I have been paid in Bitcoin.I am a sole trader working in the online marketing space, residing and paying tax in the UK.I have been providing marketing se… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
A couple of years ago my employer closed the office I worked
A couple of years ago my employer closed the office I worked at (which was located a few miles from my home) and asked me to instead work from home, travelling to their other UK office (about 100 mile… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
If I give money to a US LLC to trade cryrocurrenxies for me,
If I give money to a US LLC to trade cryrocurrenxies for me, how will I be taxed in the U.K.?… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
I need advice on uk tax for trading forex. Do you deal with
HI there. I need advice on uk tax for trading forex. Do you deal with UK tax? … read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
I left my job on October 31, 2017. The last payment was
Hi, I left my job on October 31, 2017. The last payment was 24.11.2017. but I have not yet sent my 45 and the last payslip. I contacted my employer and the answer was to wait. Can you tell me how many… read more
Sam
Sam
Accountant
14,037 satisfied customers
I have a question about the distance selling EU VAT
I have a question about the distance selling EU VAT thresholds … read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
I needed some help regarding deferred cash and deferred
hi i needed some help regarding deferred cash and deferred shares … read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
My partner and I have just purchased a holiday property in
Hi My partner and I have just purchased a holiday property in Alderney - one of the Channel Islands. We have re-mortgaged our property here on the mainland and are considering renting the holiday prop… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x