In general not if you live for seven years after you make the gift(s) and depending on the amount of the gift and the way you make it/them (i.e. via trust or not).
This is an inheritance tax question - but may also involve local authority claims if you need to go into a residential or nursing home within a 'reasonable' time of your giving away your capital (There are rules designed to prevent your trying to avoid having to pay your own way via deliberate deprivation of your capital).
Focussing on inheritance basics however you need only be concerned about inheritance tax (IHT) if your total net worth (your estate) at your death is worth more than £325,000. This is the current 'nil rate band'.
If you are married or a widower/widow to someone who left everything to you, their spouse, and they have not or did not use any/all of their own nil rate IHT (also currently £325,000) when they died - then you could end up with a double allowance for a once combined estate worth £650,000.
In such circumstances you need only worry about IHT if your combined estate is worth more than two nil rate bands (and the first to die did not use any/all of their personal nil rate band).
Note however that any gifts you make (typically worth more than £3,000 a year) within the last seven years of your death will be added back, in whole or in part on a sliding scale, as if they are still part of your estate. .
An example helps ; Assume you are single (never married or entered a civil partnership. Note living together does NOT count) and you die leaving a net estate worth £250,000 (This is after all mortgages, other debts and funeral expenses have been paid).
However two years before you died you made a gift of assets worth a total of £150,000. Such gifts made within the last seven years of your death (either in whole or in part if made three or more years and up to seven years earlier) will be added back for tax purposes. In this example £150,000 will be added to your £250,000. Your estate for tax purposes will therefore be £400,000. This is £75,000 over the £325,000 nil rate band. This £75,000 will trigger a 40% tax charge. £30,000 tax will therefore need to be paid by your executors before the Government will grant probate and the balance of your estate can be distributed as per your wishes.
I expect you are thinking of making gifts to your children now so as to reduce the estate you do end up with at death and so avoid IHT.
Bear in mind you may make gifts of up to £3,000 per person per year to as many people as you like without such sums being counted back to your estate in the last seven years of your life. There are other small gift exemptions but, by your description of a large cash sum, these will not absorb the majority of the cash sum you are thinking about.
As already noted you therefore need to either have a total estate (including any gifts or part of those gifts) worth less than £325,000 (currently) or live for at least seven years after making meaningful gifts to be sure that they are not added back and so escape the tax.
The trick is always to balance keeping funds you might need until you die, with handing over capital or other valuable assets prematurely and then having to go without.
The middle ground of claiming to have made a gift of an asset but then gone on enjoying an income or use of that claimed gift is not viable and will be seen straight through by good old HMRC.
Your description of not needing the cash you have in mind and assuming you face an IHT bill on your total estate at death if you take no action very much suggests that outright gifts would indeed make sense. You must then hope to live for another seven years - and at least three!
If lifespan is already a concern then there are good proven (mainstream) ways to avoid IHT after just two full years and yet leave the capital at your disposal if needed.
Finally it may be worth mentioning a little known IHT planning opportunity. If you are actually building large cash sums you don't need because you have a fair bit higher income than you now need then you can in fact make gifts out of such excess income (excess being defined as money you will not miss or diminish your standard of living by giving up) then you can in fact gift any such amount – even if this is £1million a month – under the gifts out of excess income concession. Such an allowance can for some people quickly add up to far greater sums than they might otherwise be able to gift away and gain immediate removal from their estate. Nice thought!
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