Making cash gifts to your kids

A client got in touch recently to check if they were allowed to give £500 a month from their pension income to their children.

This simple answer to this is ‘yes’. You can gift any amount from your taxable income as long as it doesn’t affect your standard of living. Your taxable income could include salary, pensions or buy-to-let rental income.

You can also ‘gift’ as many individual amounts of £250 as you want throughout the year, tax free. Larger gifts of over £3,000 a year are potentially liable to Inheritance Tax rules if you die within 7 years of making the gift.

Many parents want to help their children financially if they able, but if you want to make sure gifting is going to be tax-efficient just give us a call and we’ll be happy to advise.