Retirement Advantage has revealed new research which shows a significant number of Gens x and y are receiving gifts from older relatives, with these ‘living inheritances’ helping out with the everyday cost of living as well as weddings, holidays and getting on the housing ladder.
The data shows 2 in 5 people (39%) aged 50 or over have helped children or grandchildren financially in the last six months, with the top five reasons for gifting being:
Birthdays 25%; university 23%; general loans 22%; paying off debt 19%; house deposit 18%.
'Living inheritances are clearly helping out cash-strapped children and grandchildren who may be struggling with the day-to-day cost of living. There are some simple rules to remember when gifting which should ensure you don’t fall foul of the tax man. The main thing to remember if you are aged 55 or over, and thinking of gifting some of your pension, is that any withdrawal over the first 25% is treated as income and will be taxed as such'.
Government website explaining the tax rules around gifting: https://www.gov.uk/inheritance-tax/gifts
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