Expert gives 'Bank of Mum and Dad' inheritance tax warning amid cost of living crisis

dailyrecord.co.uk:

Rising bills will lead Scots to turn to the "Bank of Mum and Dad" as the cost of living crisis mounts, an expert has warned.

Lawyer Grant Jonson said that as inflation rises, increasing numbers of parents will feel obliged to give their children money.But he warned those donating lump sums of cash to their offspring could "come at a cost" in terms of inheritance tax.While the so-called Bank of Mum and Dad has more traditionally been linked with parents helping their adult offspring to get on the property ladder, Mr Johnson said rapidly increasing living costs, combined with the natural instinct of a parent to help, could see more people turn to this.In such situations he said expert advice should always be sought, to avoid "potential inheritance tax implications".

HM Revenue and Customs ( HMRC ) rules set out that cash or items with a value of up to £3,000 can be given tax free each year - although different limits apply if money is being given to a child towards wedding costs Gifts worth more than that could be liable for inheritance tax if the person making them dies within seven years.Mr Johnson, of law firm Lindsays, said: "The natural instinct of a parent is to help wherever they can.

Sometimes that means they want - or need - to give their children money."There's the chance that this could become even more common as bills for all of us rise."He added: "Looking at the property market alone, it may even be that more first-time buyers will be reliant on their families for support because they can save even less due to the cost of daily life going up."But the lawyer stated: "Sadly some gifts come at a cost which all too many people do not realise, perhaps most commonly when trying to help someone buy a home of their