maternity leave - extra money - help!

soon2bmum

Hi there. This is my first post so hope I am in the right place and make sense:D I am know on maternity leave and will be taking a fair hit in my wages (over £1000 per month). Although I have savings to cover this so am not worried. However my Dad has very kindly offered to top my wages up from SMP to what I would normally recieve so we are no worse off.
My question is what is the best way to do this? He has his own business and so was going to 'employ' me as a consultant and I would then do self assessment however it seems I can not do any other work while claiming SMP. Also he already uses his £3k gift allowance to give use a donation to our mortgage! And my mum uses hers to do the same for my brother. I was thinking that a loan might be best but then he wouldn't be able to do it on a monthly basis - would he? Or could a gift to the grandchild be the way forward.
Don't want to get in a mess about tax but it seems really difficult for him to give us some extra money!!
Any advice would be greatfully recieved!
Thank you

ginvzt

Can't he provide 'enhanced' maternity pay? My previous employer was paying full pay for 23 weeks and then SMP for the rest 16 weeks, conditional that you work for them for 1 year after you are back from maternity pay. This might be the way forward...

hayleyc_2

I'm confused.. surely a father can give his daughter any gift he likes? Why can't he just give you the cash if he wants to?? Surely there must be hundreds of parents who give their children more than £3000 a year... Maybe I'm completely missing the point! If so just ignore me

Hayley

SandC

That's what I thought Hayley. It's a taxation area that I always presumed was not exactly strictly adhered to.

How do people get away with paying for their child's wedding for example?

I am sure someone knowledgeable will enlighten us.

sooz

I think wedding counts as a special event, when you can give more

Your father can gift any amount he wants to you, but needs to survive the next 7 years so that you don't pay IHT on it. I think you get taper relief after 3.

DrFluffy

hayleyc wrote: »

I'm confused.. surely a father can give his daughter any gift he likes? Why can't he just give you the cash if he wants to?? Surely there must be hundreds of parents who give their children more than £3000 a year... Maybe I'm completely missing the point! If so just ignore me

Hayley

Sounds like Dad wasn't planning on paying her, but his 'company' was... Putting it through the books instead...

Fly_Baby

I might not have a clue here, but cannot he just simply give you the money? Like to make a regular transfer to your account? I am sure there are lots of young people who get some financial support from their parents - is it against the law?

Or, maybe he could just pay your bills. Like to arrange a standing order for your council tax, direct debits for mobile, Internet, water and electricity to come out from his account. It will be a very effective way for you to save on your outgoings. Is that allowed?

pamelab21

do you mean that your Dad is not actually 'gifting' you the money (not prepared to give you a 12k lump sum = 1k a month for a year) but he is 'employing' you through his company to enable you to claim maternity allowance and full benfits AND get paid a full wage through his company?

JimmyTheWig

As per sooz (post #5) the £3000 limit is for inheritance tax purposes. You are right that you can't work for his company whilst on maternity leave (the whole point of paid leave is that you have a rest and look after your baby, etc). But I don't see why he can't just give you the money from his own account. Obviously he will have paid income tax on this (I don't know if this is what you were hoping to avoid).

soon2bmum

yeah I wouldn't actually be working for him - well maybe the odd bit here and there. Have a full time job else where, which is who I get SMP from. It was just that we thought that he couldn't give more than £3K per year. He can give me the money from his own account rather than putting it through the business that was just a thought, coz I do help out with bits and pieces of marketing stuff! Think it must be the inheretance tax issue that he was trying to avoid - he is getting on a bit
Only benefit I would get is child benefit the same as when I go back full time - its just because I get no full pay from my employer when I am on maternity - 6 weeks at 90% then SMP.
Thanks for the help - just didn't want to be stuck with a tax bill further down the line so wanted to try and get it all sorted first!!!

Nicki

If you check out this guide

http://www.thisismoney.co.uk/help-and-advice/advice-banks/article.html?in_advicepage_id=103&in_article_id=396128&in_page_id=90

it says that in addition to £3,000 per year being tax free, your dad can also make regular monthly payments of any sum to a family member provided this does not impact on his own standard of living without incurring any additional IHT liability.

hth