2 Mins
Tis the season of gifting
It’s that time of year again when you might be considering gifting something away to a loved one.
Potentially exempt transfers (PETs) allow an individual to make specified gifts of unlimited value that will be exempt from IHT if the person gifting lives for 7 years following the gift. If the transferor survives the gift by 3 years but not the full 7, IHT taper relief will apply. This will reduce the rate of IHT due on the gift.
These gifts should form part of a planned IHT strategy and can potentially provide large tax savings.
If the gift is of cash, IHT is the only tax to consider, if assets are gifted, capital gains tax must also be considered.
While there is no paperwork to file with HMRC when a gift is made, it is important to record the gift and make it clear that it is a gift and not a loan.
Will there be festive surprises from Holyrood this Christmas?
Last month Jeremy Hunt delivered the 2023 Autumn Statement from Westminster and in just a few days, on 19 December, the Scottish Government will announce their Budget plans.
From a personal tax perspective, under the devolved powers of Holyrood, the Scottish Government can alter some of the personal tax rates and bands that apply to Scottish taxpayers, in comparison to our UK counterparts.
Currently, these powers are being used with different rates of tax applying to income tax for Scottish taxpayers and it will be interesting to see if any further changes will be announced.
As always, we will issue a summary of the announcements made after the Budget.
Christmas poem
Hark the herald angels sing
Enchanting time it’s a wonderful thing
Nearing the end of the tax return year
Deadline to file creeps ever near
Excitement begins as the decorating starts
Remembering those who are dear to our hearts
Shopping for presents, buying the Christmas tree
Of course, check with HL what you can gift tax-free
Not long now, one less sleep to go
Listening for Santa singing ho ho ho
Out of the night the morning springs
Goodwill to all as Christmas begins
Giving the presents, everyone is here
It’s a truly magical time of the year
Everyone at HL wishes you a Merry Christmas and a Happy New Year
