Taxes due on a gift to a grandchild
Posted: March 11th, 2022, 3:20 pm
Hello,
I very rarely post on TLF but have been an avid reader of TLF and Motley Fool for many years. Over that time, the contributors to these boards have provided me with useful advice, and I'm after yet more help.
When my son was born, his grandparents started putting aside some money into a Witan Investment Trust in his name. Recently they asked him to set up an account with Hargreaves Landsdown, through whom they've been investing, and they then transferred the investment of roughly £35k into his account. I don't think the money was held in a trust (apologies if this is a bit vague) and I'm wondering what tax liability he has due to this gift, both now and in the future.
Firstly, would I be correct in thinking there's no inheritance tax due if his grandparents are alive for seven years from the time the money was gifted/transferred into his name?
Secondly, is there capital gains or similar due if he sells all of some of the investment? I think the current CGT allowance is £12,300, so could he sell £12k in each of the next three tax years (depending on the fund's performance obviously) and avoid any CGT?
Hopefully this is sufficient information, but feel free to ask for more and I'll do what I can to provide it,
Many thanks in anticipation of your help.
f21
I very rarely post on TLF but have been an avid reader of TLF and Motley Fool for many years. Over that time, the contributors to these boards have provided me with useful advice, and I'm after yet more help.
When my son was born, his grandparents started putting aside some money into a Witan Investment Trust in his name. Recently they asked him to set up an account with Hargreaves Landsdown, through whom they've been investing, and they then transferred the investment of roughly £35k into his account. I don't think the money was held in a trust (apologies if this is a bit vague) and I'm wondering what tax liability he has due to this gift, both now and in the future.
Firstly, would I be correct in thinking there's no inheritance tax due if his grandparents are alive for seven years from the time the money was gifted/transferred into his name?
Secondly, is there capital gains or similar due if he sells all of some of the investment? I think the current CGT allowance is £12,300, so could he sell £12k in each of the next three tax years (depending on the fund's performance obviously) and avoid any CGT?
Hopefully this is sufficient information, but feel free to ask for more and I'll do what I can to provide it,
Many thanks in anticipation of your help.
f21