Can both husband and wife gift £250 to the same person?

Q: “Can both husband and wife make small annual gifts of £250 to the same person even though one of them does not pay income tax?”

The short answer is that both of you can make small annual gifts of £250 to the same person. The fact that one of you doesn’t pay income tax doesn’t affect your ability to gift money.

But I confess, I’m intrigued by your question. And, if you were my client sat in front of me, I’d have some questions of my own to ask.

Who is that you want to give the money to? Why do you want to give it (is it for a special occasion, like a wedding?) Why do you want to give this particular amount? Will that person make good use of the gift?

The reason I ask, is that there are so many options when it comes to gifting - all of which have no inheritance tax implications.

Many people don’t know just how much you can gift while you’re alive and still around to see the joy your gift can bring. So, here’s an at-a-glance table to show you the main gift allowances. Just be aware that tax rules change and consider taking professional advice. And it’s worth keeping a record of any gifts in case they’re called into question later down the line.

A few other things to think about…

In addition, I’ve jotted down a few other pieces of information that sprung to mind when reading your question, which you might find helpful.

Marriage allowance - you mentioned one of you doesn’t pay income tax. In which case, I thought I’d just check you know about marriage allowance. If you're married or in a civil partnership, the marriage allowance lets the lower earner of the couple transfer £1,260 of their personal allowance to their spouse. The lower earner must normally have an income below their personal allowance of £12,570.

The higher earning spouse, who must be a basic rate taxpayer, will then receive a tax credit for the amount of personal allowance transferred to them, which is then deducted from the amount of tax they would usually have to pay.

If you're in Scotland you can claim marriage allowance if the higher earning spouse's Personal Income Tax rate is starter, basic or intermediate.

If you or your partner were born before 6 April 1935, you might benefit more as a couple by applying for Married Couple’s Allowance instead.

Junior accounts - if the person you’re gifting the money to is a child, think about how they might use it. If they don’t need the money for the foreseeable, consider if it’s better to contribute to a junior ISA or junior SIPP (or open one if it’s your child you’re talking about). Both accounts are tax-efficient ways to save and, over time, can create a real financial security blanket.  There are no service fees for junior accounts at Fidelity either.

Do you have over £250k invested (including your pension)?  - if you do, you’d qualify for our Wealth Management service. If your investments are dotted around, you might like to think about moving them to us to take advantage of this service and the unique Wealth Management benefits we offer (which include your own wealth relationship manager, like myself, as well as exclusive events and a regular portfolio review).

• Learn more about Wealth Management service
• Find out how to transfer investments to Fidelity

Passing on your wealth - Your pension is a good way to pass on your wealth as it typically sits outside your estate for IHT purposes. Make sure your will and ‘Expression of Wish’ form (which informs scheme administrators know who you’d like your pension to be paid to) are both up to date. It will save your loved ones from further heartache once you’re gone.

If you’d like more hints and tips about passing on your wealth, we’ve got some useful information that can help you plan ahead. Learn more about passing on your wealth.

About Maria Gaita - Wealth relationship manager

I have over eight years’ experience in banking and wealth management. I enjoy working with customers to understand their needs so that I can support them in creating financial plans to achieve their long-term goals. Outside of work I like spending time with my young family, and I have a passion for history and architecture.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.