Can I gift 15,000 to parents?

Mon9800

I'm eligible to get a 15k loan with a good rate and want to use this money to give to my parents so they can use it to pay off another loan with a much higher rate.

They would then pay the repayments on my loan and thus save money.

What would be the best way to do this? Can I just transfer the total loan money straight into one of their bank accounts or is this complicated by tax?

Cheers

fengirl_2

There is no Gift Tax in the UK, but it might affect their benefits entitlements or care home fees.

Mon9800

So the 3k gift limit thing I've heard about doesn't apply here?

Thanks

00ec25

that is in respect of inheritance tax - you can gift £3k pa. free of any IHT liability.
Since (one expects!) you will live longer than your parents your £15k will not really be at risk of IHT unless you die in the next 7 years and your total estate is over IHT limit?

There is no other tax liability on the gift either for you or them

tyllwyd

Have you & your parents thought through the whole implications of this? If they have a £15K loan at a high interest rate, that means that the loan company thinks they are higher risk - are you quite clear why? Do they have other debts?

If they are struggling and have other debts have you thought about what will happen if they can't pay for everything. If they go onto a debt management plan etc you will be just another creditor, and they won't be able to treat you more favourably than the others.

Have a good think about it - if you can't afford to lose this £15K, or you can't afford to pay back the loan yourself if your parents don't pay you, then my advice would be not to get involved.

If your parents are in financial trouble, the first step would be to talk to one of the debt advice charities. Make sure they do that before you borrow any money on their behalf, so that you all go into the situation with your eyes open.