Must I pay Capital Gains on a cash gift?

IrisMurdoch

Hello. Can anyone help? If my boyfriend gives me a sum of cash for a flat deposit, am I liable for capital gains?

If we marry and THEN he gives me the cash gift, am I liable?

Thanks so much!

scottishblondie

No, there is no tax on money that is gifted. The only tax implication may be inheritance tax if he dies within 7 years and his estate value is above the threshold.

GDB2222

Actually, there's no inheritance tax implications either, unless he's already given away over £300k in the last 7 years.

GDB2222

By the way, nice chap, and any chance of a few bob coming my way too please?

scottishblondie

GDB2222 wrote: »

Actually, there's no inheritance tax implications either, unless he's already given away over £300k in the last 7 years.

HMRC_Website wrote:

Any gifts you make to individuals will be exempt from Inheritance Tax as long as you live for seven years after making the gift. These sorts of gifts are known as 'potentially exempt transfers' (PETs).
However if you give an asset away at any time, but keep an interest in it - for example you give your house away but continue to live in it rent-free - this gift will not be a potentially exempt transfer. Follow the link below to find out more.
If you die within seven years and the total value of gifts you made is less than the Inheritance Tax threshold, then the value of the gifts is added to your estate and any tax due is paid out of the estate.
However, if you die within seven years of making a gift and the gift is valued at more than the Inheritance Tax threshold, Inheritance Tax will need to be paid on its value, either by the person receiving the gift or by the representatives of the estate.
If you die between three and seven years after making a gift, and the total value of gifts that you made is over the threshold, any Inheritance Tax due on the gift is reduced on a sliding scale. This is known as 'Taper Relief'.

Having read the HMRC website I see that you are also allowed to give away up to £3k in a year in gifts without it being subject to any inheritance tax at all. If you are married, inheritance tax also does not apply.

timmyt

scottishblondie wrote: »

No, there is no tax on money that is gifted. The only tax implication may be inheritance tax if he dies within 7 years and his estate value is above the threshold.

exactly right. look at http://www.which.co.uk/advice/inheritance-tax-explained/inheritance-tax-planning-and-tax-free-gifts/index.jsp for a good summary of the small amounts you can give away each year.

Scottishblondie makes the valid point that if you are not rich enough to trigger IHT then it matters not how much you have given away.

sunshinetours

scottishblondie wrote: »

Having read the HMRC website I see that you are also allowed to give away up to £3k in a year in gifts without it being subject to any inheritance tax at all. If you are married, inheritance tax also does not apply.

You can also use your previous tax years allowance if not used as well so potentially £6k. It is £3k per donor not donee don't forget