It’s been a long year, but the holiday season is right around the corner. In the build up to Christmas there’s so much to do, decorations to put up, food and drink to buy and gifts to wrap. But what if you’re struggling to come up with the right gift idea for someone, and asking yourself is gifting money for Christmas a good idea? It goes without saying there is no one great present for everyone, but gifting money can be the perfect solution for a lot of reasons.
It takes the risk out of giving a bad present
It can be very difficult trying to find a present a loved one will love. They could already have everything they need or you could be worried they may not like what you give them. This is where gifting money can be a great solution instead, giving the recipient the choice of what to do with their money.
It gives a loved one the gift of saving
If you know someone is saving towards something expensive, whether that’s a holiday or a luxury item, gifting money will be a very thoughtful way of helping them achieve this goal. On the other hand, if your recipient is a niece/nephew, grandchild or a friend’s child you may want to give them something more thoughtful, rather than clothing or a toy they will soon grow out of. Shepherds Friendly’s Junior ISA is a great way to save for a child’s future, with their parent or guardians permission you can help them save and once they’ve turned 18 they’ll receive a lump sum to invest towards something for their future. Whether that’s a house deposit, their first car or if they decide to go travelling. Gifting money will help give them a much more thoughtful gift.
It can help someone who really needs it
Christmas is the season of goodwill, and a random act of kindness for a loved one or a stranger will go a long way. If someone you know is struggling financially, rather than buy them a present, helping them through a difficult time is a very thoughtful way to show you care.
Will I be taxed for gifting money?
For small amounts at Christmas or even a birthday you won’t be taxed as you can give away money or small gifts worth up to £250 throughout the year. For larger amounts you can give away money or gifts worth up to £3000 without paying any tax, this is what’s known as your “annual exemption”. For more information visit, Giving Money: 3 things to know, a guide to gifting money to relatives and the rules of gifting money to children.
Needless to say, there’s no perfect gift for everyone and some friends or family may or may not prefer receiving money. It’s best to weigh up the pros and cons so your loved ones can receive the best possible gift this Christmas.