£100,000 gift from parents - tax and savings advice

pepperswanson

Hi,

My mum is selling her house and wants to gift me £100,000 as an early inheritance.

Can she just give me this money and what are the tax and legal implications.

Also, can I just open a saving account and pay this large amount in?

I don't believe that it could be this simple so does anyone have any advice?

Many thanks

Lokolo

Yep thats fine you can go pay it in.

However depending on what else she owns etc.etc. it could come under inheritence tax if she should die within 7 years. I don't know the ins and outs about IHT so someone might be able to give you better information.

Aegis

pepperswanson wrote: »

Hi,

My mum is selling her house and wants to gift me £100,000 as an early inheritance.

Can she just give me this money and what are the tax and legal implications.

Also, can I just open a saving account and pay this large amount in?

I don't believe that it could be this simple so does anyone have any advice?

Many thanks

It's tax free without reservation if she survives for at least 7 years after making this gift. Within 7 years there's the potential for up to 40% taxation on any part of her estate outside the nil-rate band. It gets a bit complicated at that point, but essentially if she survives for 7 years or more, you don't have to worry.

There are insurance products designed to protect gifts like this against insurance policies, but I've yet to see someone take one out specifically to cover a gift rather than as a blanket inheritance tax mitigation tool.

You should ask her to electronically transfer it to your account. That way it will arrive on the same day and you can start to work out what to do with it without worrying for several days that a cheque hasn't cleared or similar.

opinions4u

pepperswanson wrote: »

My mum is selling her house and wants to gift me £100,000 as an early inheritance.

Would she adopt me please, and we can split it 50/50 then.

Can she just give me this money

Yes.

and what are the tax and legal implications.

Linky for inheritance tax information. Basically, tell her not to die for seven years.

Also, can I just open a saving account and pay this large amount in?

Yes, but unless you are planning to spend it all in a short period I would strongly suggest that you see a reputable IFA. Linky for this. This will address getting the best returns for your risk profile, protection for your lifestyle and planning for later life, children's eduction, your retirement and a lot more.

Good luck.

G_M

Also, can I just open a saving account and pay this large amount in?

Yes but remember your savings are only protected up to £50K with any one bank (see here for definition of 'one bank') unless it's a joint account.