Martin Lewis issues £3,000 inheritance tax warning to grandparents who gift money

A person wrote in to the Not The Martin Lewis Podcast, where Mr Lewis gets experts on key topics such as inheritance tax to talk through how they work.
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Martin Lewis has shared a savvy inheritance tax tip that could save grandparents up to £3,000 when gifting money.

A listener reached out on the Not The Martin Lewis Podcast, where experts are invited to demystify topics like inheritance tax.

The query was: "My grandparents wish to gift me part of my inheritance early. I understand that they can give £3,000 each tax-free. But since this is the first time, can they carry over last year's allowance? ".

Tax expert Kari Mellon from Opes Tax confirmed during the podcast: "Yes, £6,000 in the first year and then £3,000 for each year afterwards."

BBC Sounds presenter Mr Lewis chimed in: "They may be able to give you more if they have surplus income that they could give away."

Rebecca Benneyworth of Rebecca Benneyworth and Co elaborated: "Providing you make regular gifts from your surplus income which do not affect your standard of living, those gifts are immediately free from inheritance tax.", reports Birmingham Live.

She further explained: "But first of all, you have to identify what is your surplus income. If you take in all of your income that you receive in a year, take off all of your expenses including a new car or a holiday and your tax liability. If you have a surplus left over, then that's the maximum that you could give away."

She continued: "There was a case a few years ago where someone died after only making one or two gifts out of surplus income, but the executors were able to prove that the intention was there to make it a very regular pattern, so they were successful in their claim."

"But if you've made them three or four times a year for a number of years, you've got a really good pattern there."

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