Gifting money and Capital Gains Tax

[Skippy12]

Hi, My wife is considering gifting some money to a friend and I would like to find out if there would be Capital Gains Tax to be paid on the amount (£5,000) and if so, who would be responsible for payment i.e. my wife or the beneficiary? This would be a one-way transaction and not in payment for anything. Any thoughts on the matter would be much appreciated. Thanks

[Sam101]

No tax at all to worry about, although if your wife's assets are above the inheritance tax nil rate band allowance should she die in the next 7 years, then thee gift could be counted within her assets for tax calculation.

We all have a 'gifting allowance' and basically can gift up to £3000 to any one person in a tax year, £250 to as many people as you wish, additional gifts to family at weddings etc, If you 'Google' Gifting Allowances, you will find all the details.

[Skippy12]

No tax at all to worry about, although if your wife's assets are above the inheritance tax nil rate band allowance should she die in the next 7 years, then thee gift could be counted within her assets for tax calculation.

We all have a 'gifting allowance' and basically can gift up to £3000 to any one person in a tax year, £250 to as many people as you wish, additional gifts to family at weddings etc, If you 'Google' Gifting Allowances, you will find all the details.

Hi Sam101,
Thanks for your response. I've seen the gifting allowances, but apart from wedding gifts (up to £5000) the largest allowance appears to be the £3000 gift that you mentioned. As my wife is thinking of gifting her friend more than this, possibly more than the £5000 I mentioned, wouldn't the balance over £3000 incur Capital Gains Tax? And if it does, would my wife have to pay the tax or would it be her friend? If there is a tax to pay I want her to be aware of it before she makes the gift so any help you can provide would be appreciated. Thanks

[Sam101]

Not at all. Capital gains tax only comes about where an asset has been acquired and at a later date sold or disposed of and a gain has been made. It does not apply to any gift of capital a person makes to another. NO TAX.

As I said earlier, gifts over £3000 to an individual 'may' be brought into the calculation in respect of inheritance tax if that person died within 7 years.