Cash Gift from parents - Do I need to pay income tax on this gift ?

245

Comments

  • dzug1
    dzug1 Posts: 13,535 Forumite
    First Post Combo Breaker
    Garv0r wrote: »
    I'm sure there is an income tax rule that might come in to play here, which arose as a result of fathers gifting their ex wives substainence money.

    If "it isn't in your usual lifestyle" to receive such large sums, then I believe it might be subject to Income Tax. I'm guessing it's an attempt to stop money laundering? Again, knowing me I'm completely wrong! :D

    It's NEVER subject to INCOME tax because it's NOT income.
  • dzug1
    dzug1 Posts: 13,535 Forumite
    First Post Combo Breaker
    krs_sn wrote: »
    I have a query...I am getting married in July...My future father in Law who lives in Germany wants to make a cash gift of £5000 into my account towards organizing the wedding in the UK...Do I have to pay tax on this amount? what are the implications?

    £5000 on marriage or anticipation of marriage is exempt from UK IHT - so no tax for you

    There may be a German tax implication - I've no idea
  • Mahmood_Reza
    Mahmood_Reza Posts: 179 Forumite
    Individuals are not normally liable to tax on the receiving of gifts (cash, shares, houses etc), whether tax becomes an issue depends on how those gifts (assest) are used.

    If those assets are used to generate income, eg bank interest, dividends, business profits then that income is taxable . If you sell or give away any of those assets that are classified as taxable then any (capital) gains will be taxable - cash is not taxable.

    Just to mention one point about Inheritance Tax, it is normally payable by an individual where the gift is made to them within 7 years of the donors death and they have agreed to pay the tax due.
  • glider3560
    glider3560 Posts: 4,115 Forumite
    Name Dropper First Anniversary First Post
    Mahmood_Reza wrote: »
    Individuals are not normally liable to tax on the receiving of gifts (cash, shares, houses etc), whether tax becomes an issue depends on how those gifts (assest) are used.

    If those assets are used to generate income, eg bank interest, dividends, business profits then that income is taxable . If you sell or give away any of those assets that are classified as taxable then any (capital) gains will be taxable - cash is not taxable.

    Just to mention one point about Inheritance Tax, it is normally payable by an individual where the gift is made to them within 7 years of the donors death and they have agreed to pay the tax due.
    Why resurrect a three month old thread?
  • Mahmood_Reza
    Mahmood_Reza Posts: 179 Forumite
    Not quite sure what point you are making but apologies if it is not to your liking - maybe I have not got to grips fully with forum etiquette, I am a new member. I was not aware that there was a 3 month old thread, questions and comments were put and I wanted to contribute an answer. If this ussue has been previosuly dealt with (as you suggest) then why are people asking the questions thay have?
  • John_Pierpoint
    John_Pierpoint Posts: 8,391 Forumite
    First Post First Anniversary
    Just a final thought - my late grandmother tried to give everything away before she died and in her will; she must have never realised that there was a chunk left to the tax man and that he was first in line and nobody got their shares until the tax man had been given his dues.
    It caused certain conflicts within the family as to how the tax would be paid.
  • supermonkey
    supermonkey Posts: 758 Forumite
    First Post First Anniversary Combo Breaker
    jessmjc wrote: »
    I am about to receive a cash gift from my parents of £100,000.

    From an IHT perspective I fully understand that as long as they live 7 years this cash will not form part of their estate and will therefore be free from IHT.

    However, as this is a gift to myself, Should I be paying income tax on this money ?

    I fully understand I will have to pay tax on the savings that this cash generates but the income tax situation is a little confusing, any help/advice appreciated.

    regards

    Jessmjc


    Can we swap parents?
  • Sparx
    Sparx Posts: 909 Forumite
    First Anniversary Combo Breaker
    Lucky, lucky guy (or girl?)..
  • mijana
    mijana Posts: 2 Newbie
    my father is very ill and wants to sort things out before it is too late. He just sold his house and wants to give money to me and my siblings so we could buy houses for us. He lives abroad and UK IHT should not apply here. Will I have to pay any tax here?
  • ceeforcat
    ceeforcat Posts: 1,131 Forumite
    mijana - as the recipient you do not pay tax on it - no matter how large.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.1K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.6K Spending & Discounts
  • 235.1K Work, Benefits & Business
  • 607.8K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards