Tax warning: Parents & grandparents told they could be risking HMRC bill | Personal Finance | Finance
Inheritance Tax rules mean gifts up to the total of £3,000 can be given away each tax year and count as an annual exemption, Openwork explained.
However, gifts worth more than £3,000 can be added to the value of someone’s estate if they’re given up to seven years before death or mean tax bills for the people receiving the gift.
The study shows nearly half (46 perfect) of parents and grandparents are unaware that they could face a tax bill if they give money to children and grandchildren, while nearly two out of five (38 percent) did not know there were any potential tax risks from helping out families financially.
Furthermore, among those who were aware there was a possible tax implication, there is still some confusion.
The study found of those aware of the possible tax bills, 80 percent said they still find the rules complicated.