Child Tax Credit and Monetary Gift

Legacy_user · 18 September 2004 at 2:23PM

My husband and I are currently claiming CTC. My parents are considering downsizing and selling their house next year, and if all goes to plan, they would like to help us out financially. I would put the money into high interest savings to see us through the kids pre-school time.

Question being whether the Inland Revenue would have to be told.

And are there any other considerations I might be overlooking? I know that there are inheritance tax issues but only if both my parents don't survive the next 7 years as I understand it.

Thanks.

Ted_Hutchinson · 18 September 2004 at 4:27PM

we will not normally take capital (that is, deposits in
current and savings accounts at banks and building societies, lump sum payments and the value of property, shares and other investments) into account when we work out your entitlement to tax credits.

This is from Child Tax Credit and Working Tax Credit - A Guide May 2003

I would put the money into high interest savings to see us through the kids pre-school time

Any interest from this investment will have to be declared as income.

Question being whether the Inland Revenue would have to be told

Not in my opinion. The Changes of circumstance which you are required to tell them about are listed in page 27 of the guide linked to above and I cannot see anything relating to an increase in Capital.

I know that there are inheritance tax issues but only if both my parents don't survive the next 7 years as I understand it.

This is my understanding also but I don't have much idea of Inheritance Tax laws or the limits on how much Parents can give to children or grandchildren in one off lump sum payments. There are more details here
IHT3 - Inheritance Tax. An Introduction
Perhaps a post in the Cutting Tax forum would find someone with a better understanding of this.

System · 18 September 2004 at 4:54PM

Many thanks, that's very helpful. ;D

SambaRamba · 23 October 2004 at 12:26AM

Thanks very much for this info Ted, I found it very hepful too.

Jonah1156 · 22 May 2007 at 8:43AM

My Daughter has been living with me since the beginning of March this year, i have just claimed Child tax credits for her ( she has just turned 18 & is a student!) She is thinking of moving to a bedsit as she is currently sleeping on my sofa. How soon after she moves out do i have to inform Child Tax credits that she has gone? Iam a bit concerned that she might not like living in this bedsit & may soon return to my place, tail between her legs very soon!
Also, as she is only on EMA can she get any other benefits apart from Housing Benefit? As £30 a week doesnt seem much to be able to survive on!
Many thanks if i can get any Advice!

jay1jay · 24 May 2007 at 8:33PM

Jonah1156

You should tell tax credits as soon as she moves out. Any money you receive for her for any time after the day she moves out will have to be paid back. If she comes back you can always add her back on to your claim if you are still claiming. Or make a fresh claim.

Don't think she will get any other benefits. When I was a student I worked nights in a bar & earned £40 per week. All I got was housing benefit and 25% off my council tax bill.

jay1jay · 24 May 2007 at 8:35PM

As for capital - tax credits just need to know of any interest of over £300 per year. If the capital is in your kids names you won't have to declare anything. Also, premium bonds don't earn interest but you may win prizes and you can cash them pretty quickly.

FrugalJo · 8 June 2007 at 2:09PM

I inherited a lump sum last year which is big enough to to be included in my renewal for CTC and WTC, just wondered if they take this into consideration when working entitlements out.
Help appreciated
Jo

Child Tax Credit and Monetary Gift

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