Regular cash gifts to my mum

honestgirl_2

Hello,
My mum helps us out by looking after our children when we're at work. We give her money every month in return as there is no way she could live just on her pension without our help or without selling her home.. It's about £400 and we want her to see it as a regular gift rather than income. She feels she should declare it to the tax man and be taxed on it. Is it legal for me to give my mum money and for her to keep it rather than pay pax?

Thanks.

honestgirl_2

Oops - I meant 'pay tax' obviously!!!

Goldenyears

In the situation you describe there is no gift tax in the UK and the money you are giving your Mum is not her income (by the way we define income) so no tax is payable.

McKneff

Its not really a gift though is it, she looks after your children, you give her money in return for this.

I agree that it shouldnt morally be taxed but you really would be better enquiring at the local tax office or even the CAB
for clarification.

00ec25

sorry but your mother is clealry providing a service (child care) for which you are paying (just the same as if you used a childminder on a commercial basis) so it is income

dzug1

00ec25 wrote: »

sorry but your mother is clealry providing a service (child care) for which you are paying (just the same as if you used a childminder on a commercial basis) so it is income

against which she can claim expenses before tax

CLAPTON

on the other hand

if you would have anyway have given your mum 400 per month as she can't live on her pension and then, sometimes, as many grannies do, she looks after her granchildren then I would say there was not tax due.

aslo of course if she is over 65 then her tax allowance is 9,460 so any tax liablity would depend upon her pension income too
of course if she was claiming any benefits then additional income might affect this

maybe better to post up the full financial details

longforgotten

I'm guessing that if your Mum didn't need the money she would be doing it for free. For me you are giving a gift to your Mum as she needs the money. I admit I'm just looking at it morally, as you are looking after each other as a family.

Once you start thinking she is working for you there are whole load of things you need to think of. Do you check how many hours she does ? Does the £400 work out as more than the minimum wage......

If she's concerned the £400 in the hand is 'wages' , why not pay some of her bills for her. Cut out the middle man so to speak.

property.advert

Tell mam that you've already paid the tax on it and that is it. Which you have !

Cook_County

You give mum a £50 M & S voucher for Xmas because you love her. That is a gift not taxable on mum.

Next door's 16 year comes round and you give her £20 for babysitting. That is taxable income for her.

You are paying mum for services - it is not a Xmas present - indeed it is no different from paying the babysitter (except that mum may well have extra costs that she can deduct).

Mum is right - it is taxable income for her to report on her tax returns.

John_Pierpoint

I got the job of sorting out the estate of a great aunt about 15 years ago.
When someone dies there could well be two tax years outstanding - it is well worth completing those last tax returns, because even if the deceased had little more than the state provided benefits, there is probably tax to come back (possibly not if they died on 5th April).

I discovered that there was a long standing situation similar to this, where the elderly woman provided "housekeeper" services for other elderly relatives and they gave her modest payments. (We are talking 5 or 10 quid a week). She was the relatively poor maiden aunt in a similar situation and the arrangement had become more social & care than "profit".

I raised the point with the tax man involved and his reply was "Oh that is just some sort of family arrangement - I'm not interested ........ now about the house [rent a room] and her investments [That turned out to be 25K mainly inherited from a brother]"...........and he went on to help me fill in the forms.

Technically speaking he was probably wrong but that was in the days when the tax man had some discretion; the last thing he wanted was some long drawn out hassle over an elderly self employed housekeeper.

Now that we have a command and control computer system serviced by muppets (who ignore my letters) - I'm not so sure there would be such a sensible outcome.