We wanted to remind you of the Inheritance Tax (IHT) implications of making cash gifts during the current tax 2022-23 tax year that will end on 5 April 2023.
The following points will be covered in this article:
- How Much Is The Inheritance Tax Allowance?
- Exemptions For Normal Gifts Out Of Income
- What Other Gifts Can You Give?
How Much Is The Inheritance Tax Allowance?
You can give away up to £3,000 worth of gifts each tax year. This is known as your annual exemption. Any unused part of the annual exemption can be carried forward, but only for one year. So, if you didn’t make any cash gifts in 2021-22, you could gift up to £6,000 this tax year.
Exemptions For Normal Gifts Out Of Income
There are also generous exemptions for normal gifts made out of your income, but you must be able to maintain your standard of living after making the gift. There are also reliefs available for wedding or civil ceremony gifts. You can gift up to £1,000 per person with higher limits of £2,500 for a grandchild or great-grandchild, £5,000 for a child.
What Other Gifts Can You Give?
You can also give as many small gifts of up to £250 per person as you want during the tax year but only if you haven’t used another exemption on the same person. There is no IHT to pay on lifetime gifts between you and your spouse or civil partner as long as you both live permanently in the UK.
Other gifts, outside these limits, count towards the value of your estate and should be carefully considered.
For more information about IHT please visit the GOV website.
GET IN TOUCH WITH ONYX
Do you have an inheritance tax query? Our tax team are on hand to help if you have any queries regarding information in this article. If you want to discuss further, please give us a call or e-mail us at enquiries@onyx.accountants for a FREE no obligation consultation.
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Call us on 0121 753 5522 or 01902 759 800. We look forward to hearing from you!
