I was doing some research for a client into Inheritance Tax and happened upon the exemption for gifts in consideration of marriage or civil partnership.
HMRC's website explains how much parents, other relatives, and anyone else, can give a couple when they marry, without the gift being counted as part of the giver's estate for Inheritance Tax.
What made my eyes pop was that the gift has to be promised "on or shortly before the date of the ceremony" to qualify for the exemption.
It can be paid over before or after the ceremony, but it must be promised before the ceremony or the exemption won't apply.
That astonishes me. What if, for example, an aged grandparent suffering from Alzheimer's Disease remembers only when the newlyweds visit her after the honeymoon that she hasn't told them about the money she plans to give them? That gift would not qualify for exemption.
It's also such a pettifogging little rule. I can't honestly see what difference it makes if the gift is promised before or after the ceremony, in logical terms.
But then, who said tax was logical.
Which just shows you can't trust HMRC. The law (s22 IHTA 84) simply says the gift should be in consideration of marriage, while the Inspectors Manual says that the burden of proof is on the tax payer if the gift occurs after the marriage ceremony. I would say nuts to that, the burden of proof is on HMRC, but granny can always stick the cheque inside a wedding card just to be sure.
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