P564ORACLE 564 Mon 3 Mar C4 1711:01
1/6
A tax on gifts
Are your total assets ─ including your
home if you own it ─ worth more than
£67,000? If they are, unless you plan
carefully, the taxman may be the main
beneficiary of your estate, says Sue
Gorska.
Not so long ago it was Estate or Death
Duty people paid ─ and only when they
were rich. In the early 1970s, this tax
was replaced by Capital Transfer Tax, a
gifts tax that may have to be paid not
only at death but on any large transfer
of money you make when alive.
more follows >
Your Money ...560 Tax Rates ...565
RECRUITMENT ADVERTISING ON 496
P564ORACLE 564 Mon 3 Mar C4 1718:31
2/6
A tax on gifts
Capital Transfer Tax is payable on any
gifts you make, whether theyWre made
when you're alive or on death. Some
gifts, such as those between a husband
and wife, are exempt from the tax.
The tax bill depends on three things:
whether the gift is made before or
after death; how large it is; and the
total value of gifts you've made in the
last 10 years ─ anything before then is
disregarded. The taxman keeps a running
total of any non-exempt gifts you make
going back 10 years. Once £67,000 is
reached you start to pay tax.
more follows >
Your Money ...560 Tax Rates ...565
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P564ORACLE 564 Mon 3 Mar C4 1717:01
3/6
A tax on gifts
Gifts made while you're alive attract
half as much Capital Transfer Tax as
anything handed on after death (or in
the 3 years before death).
Say you had a total of £89,000 to pass
on. If it goes to your family on death
anything over £67,000 would be taxed at
30%, making the bill £6,600. Handing on
the same amount while you're still
alive would incur tax of 15%, making
the bill £3,300. Of course it+s no gogd
saving tax if you've nothing left to
live on because you've already given it
all to your children!
more follows >
Your Money ...560 Tax Rates ...565
P564ORACLE 564 Mon 3 Mar C4 1708:57
4/6
A tax on gifts
If you know your estate will be over
the £67,000 limit, careful planning can
reduce the amount of tax you'll pay.
There are, for example, many gifts you
can make which are exempt from tax and
don't count towards your running total.
Gifts between husband and wife are
exempt, as are gifts of up to £250 a
year to any one individual. On marriage
parents may give up to £5,000, grand-
parents £2,500 and anyone else £1,000
free of tax. Everyone can make gifts of
up to £3,000 a year which aren't tax
free for any other reason.
more follows >
Your Money ...560 Tax Rates ...565
P564ORACLE 564 Mon 3 Mar C4 1704:11
5/6
A tax on gifts
If you or your spouse has a relative,
too old or ill to support themself, any
gift to help meet their regular needs
is exempt from Capital Transfer Tax.
This also applies to gifts made to a
mother or mother-in-law who can support
herself, provided she is widowed,
separated or divorced.
Gifts to UK charities are tax free, as
are gifts to public institutions such
as the British Museum or a university.
Gifts to British political parties are
tax free, subject to a limit of
£100,000 when made during, or in the
year before, death.
more follows >
Your Money ...560 Tax Rates ...565
P564ORACLE 564 Mon 3 Mar C4 1706:55
6/6
A tax on gifts
Insurance companies offer schemes like
inheritance trusts and discounted gift
schemes which can help to avoid Capital
Transfer Tax. Some of these are being
looked at closely by the Inland Revenue
Another way to ensure your heirs get
all your estate is to take out a life
insurance policy which will provide
enough cash to pay the tax bill.
Don't act before you get advice, though
from, say, an accountant, solicitor or
bank manager ─ you may find your estate
won't qualify for the tax at all!
more follows >
Your Money ...560 Tax Rates ...565
BUYING/SELLING A CAR? LOOK AT 496