Real life question, pretty simple. Family member gives another family member a gift, cheque for £13,000, are there any tax implications? Iht irrelevant as estate of the person gifting the money is well below 325k.

If the family members are spouses or civil partners (UK domiciled) then there is no tax consequence to making the gift.
If the relationship is wider, I would still say not, providing it is a ‘gift’ and not payment for ‘services rendered’ for example, when there could be income tax or national insurance issues (depending on the circumstances).
Depending on whether there are any other ‘disposals’ in the Tax Year, all or part of the gift would be a Potentially Exempt Transfer (PET) for IHT purposes (but not if it is to a spouse or C.P.).  PETs only find their way into the IHT calculations if the donor dies within 7 years of making the gift.
Remember that it is the value of the estate at death (plus any outstanding PETs) that is relevant for IHT purposes, so something that does not start off ‘life’ as being relevant for IHT could become so if the donor wins big on the lotto.
In the circumstances you describe, even with the lotto win, there would be no direct IHT bill for the recipient of the gift, as long as there are not any earlier PETs that have brought the estate down to below (currently) £325,000 - e.g. if the donor gave away £300,000, last week you could have a problem.
I hope this helps.

buttinski - July 07 2010 03:36 PM

If the family members are spouses or civil partners (UK domiciled) then there is no tax consequence to making the gift.
If the relationship is wider, I would still say not, providing it is a ‘gift’ and not payment for ‘services rendered’ for example, when there could be income tax or national insurance issues (depending on the circumstances).
Depending on whether there are any other ‘disposals’ in the Tax Year, all or part of the gift would be a Potentially Exempt Transfer (PET) for IHT purposes (but not if it is to a spouse or C.P.).  PETs only find their way into the IHT calculations if the donor dies within 7 years of making the gift.
Remember that it is the value of the estate at death (plus any outstanding PETs) that is relevant for IHT purposes, so something that does not start off ‘life’ as being relevant for IHT could become so if the donor wins big on the lotto.
In the circumstances you describe, even with the lotto win, there would be no direct IHT bill for the recipient of the gift, as long as there are not any earlier PETs that have brought the estate down to below (currently) £325,000 - e.g. if the donor gave away £300,000, last week you could have a problem.
I hope this helps.

Thanks very much for that.

100% not worried about IHT, estate is worth around 200k and there is zero chance of it going over 325,000. Donor doesn;t play lotto!!

I was being paranoid. I think it’s because I work in accountancy that I became paranoid, as there are so many loopholes and traps to fall in!

That’s okay.
If you have any specific concern then re-post.
Regards
P.S. I understand your paranoia, which is why I am hoping that someone agrees with my answer!!