Gifts of cash this Christmas are exempt from capital gains tax as well as chattels (tangible moveable assets) with a life of less than £50 years (like a watch) or a cheap chattel (costs not more than £6,000) e.g., a Primark scarf!

With regard to inheritance tax, there are a few exemptions available

1.    Small Gifts Exemption: gifts up to £250 per donee per tax year. If the gift exceeds £250 then the full amount is taxable.

2.    Annual Exemption: up to £3,000 in total each tax year.

3.    Gifts Out Of Income Earned: must be part of a series of gifts to the same person and must not reduce the donor’s standard of living so be paid out of excess income earned.

In any case, gifts in excess of these amounts will only be taxable under inheritance tax if the donor dies within 7 years of the gift.

If you are planning on doing Taxation or Advanced Tax in March 2023, I recommend you purchase Tax Condensed or Advanced Tax Condensed which will allow you to learn the technical rules at lightning speed.  

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