Financial gifts are something that many of us have dealt with or will deal with in the future. The gift can be anything from £20 to north of £10,000. There are many people who like financial gifts instead of having a consumer gift because you can figure out what to do with it.
If you are thinking of giving a financial gift while you are still alive, you might consider doing it for special occasions such as weddings, engagement parties or if someone in your family is starting a small business. Financial gifts are never seen as loans so if you give a financial present, always make it clear that it is a gift, and you will not expect it back.
Money can be a touchy subject among family and friends, so if you are going to give it as a present, make sure you are giving it to someone you know very well who will be someone who appreciates it. To make financial gifts go smoother, it is better when they are packaged in a discreet way. You can read craft magazines and blogs to get the right ideas on how to give your financial gift in a way that suits you and the person receiving it.
Inheritance Tax & Gifts
The government has its views on financial gifts which tends to come through the Inheritance Tax law. In a nutshell, it is paid when someone in your family or a close friend who has mentioned you in their will passes away. It is due if the estate passes the threshold set by HM Revenue & Customs. The current threshold is £325,000.
If you plan on giving an inheritance to your family members or close friends in your estate, you need to read more about the Inheritance Tax act because this will affect how much they can get from your estate. There are gift exemptions that are explained in detail on HM Revenue & Customs website so you can understand which financial gifts you won’t pay tax on in your estate.
Ultimately giving financial gifts can be some of the most rewarding things you can do with your money because you can really help your family and friends. Just make sure you plan your gift giving carefully.