Let the taxman help with wedding gifts
You may not have an invite to Prince Harry and Meghan Markle’s nuptials this month but there is something about Royal Weddings that brings people together.
In fact, data from the Office for National Statistics shows there was a surge in weddings following William and Kate’s marriage in 2011.
The number of weddings rose from 249,000 in 2011 to 264,000 in 2012 – the highest seen since 2004.
It may not sound very romantic, but a wedding or civil partnership can be a great opportunity for parents and grandparents to do some smart inheritance tax planning.
Parents can gift £5,000 (so £10,000 in total) and grandparents £2,500 each without inheritance tax implications (IHT) for a wedding. Other individuals can give up to £1,000 as a wedding gift without an IHT liability.
If the gift is to be effective for inheritance tax purposes, it has to be made before, not after, the wedding and the wedding has to happen, so no objections!
Individuals can separately also make up to £3,000 in gifts in a year without IHT liability. For couples that means £6,000. Unused allowance from the previous year can also be given, which might take a gift from a couple to £12,000. So taking this into account, parents could effectively give their child £22,000 free of IHT implications for their wedding.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
For tax advice please refer to an accountant or tax specialist.
