Money from parents - Do I have to pay tax on it?

ahfh1

Hi,

My parents have given me £50k to put towards a deposit on a house.

Do I have to pay tax on it, do I have to declare it to the HMRC, and do I declare it as a gift?

Thanks

theartfullodger

(Sorry to be morbid but...) As long as mum 'n dad don't die for 7 years there should be no tax to pay. (However this all depends on how the government change the rules on tax over the next few years...).

If they do die their estate may have to pay IHT (Inheritance Tax If I remember correctly) depending on how much they were worth ..

Look at
http://www.hmrc.gov.uk/inheritancetax/index.htm

If you want to learn more..

Lucky you! I wouldn't give my sons money like that, being

a) Mean...
b) I want them to learn to stand on their own 2 feet!

Cheers!

Lodger

morg_monster

My parents taught us to stand on our own two feet, then gave us money towards our house deposit... it is possible to do both, but then of course reason (a) kicks in!
(that sounds like I'm married to my brother or something, I'm not, the first "us" means me and my brother, the second "us" means me and my husband)...

ahfh1

Yes, I am very lucky that bank of mum and dad can help me out, particularly as lenders want a massive 25% deposit these days!

To make sure that the correct IHT is calculated (should they die in the next 7 years), I'm assuming that I should have some kind of formal documentation between myself and my parents of the date they gave me the money for the deposit? And that document would be held by my solicitor and/or accountant?

Cheers

googler

ahfh1 wrote: »

Yes, I am very lucky that bank of mum and dad can help me out, particularly as lenders want a massive 25% deposit these days!

To make sure that the correct IHT is calculated (should they die in the next 7 years), I'm assuming that I should have some kind of formal documentation between myself and my parents of the date they gave me the money for the deposit? And that document would be held by my solicitor and/or accountant?

Cheers

Don't see any reason why you and your folks can't just keep your bank statements for 7 years. One shows a debit, the other a credit.

theartfullodger

Just keep sensible records just-in-case... What the tax-man gets twitchy about is when there are no records. E.G. my aunt gave me £10k some (?) 4 years ago and somewhere I've a photocopy of the cheque....

Hope they live a long & happy life....

Cheers!

Lodger

getmore4less

ahfh1 wrote: »

Yes, I am very lucky that bank of mum and dad can help me out, particularly as lenders want a massive 25% deposit these days!

To make sure that the correct IHT is calculated (should they die in the next 7 years), I'm assuming that I should have some kind of formal documentation between myself and my parents of the date they gave me the money for the deposit? And that document would be held by my solicitor and/or accountant?

Cheers

It's your parents job to keep records of what they give away the for the executors of the wills/probate to sort out the tax.

You have no tax liability on gifts to you.

Just keep a record of the transfer(bank statement) with your own house documents, no need to keep with a solicitor, in case someone asks

Good idea to get the money as soon as you can then you just have to say you have a deposit in your account as savings when asked.