In need of some tax advice

26ltg

This is my first ever post after months of just reading so be gentle folks.

Hubby and I have been very lucky in the last few months and converted our Standard Life shares to cash - got about £5k in total and then out of the blue some very kind relatives gave us £20k. Naturally we have blown a large hole in this but have put some away in our online savings account and topped up our ISA's for this year. Now out of the blue the tax man has written to hubby saying "are you paying too little or too much tax?". Are they fishing or do they want to relieve us of our windfall? Any comments would be appreciated. I have no idea if we should be doing anything as we have never had money before.

whambamboo

Have a look here

http://www.hmrc.gov.uk/leaflets/iht2.htm

Cash gifts (assuming it is a true gift, not payment for something) are not taxable, unless the donor dies within 7 years of the gift, but then the tax would be on the donor's estate, not yours.

So £20k, £200k, whatever, it's not taxable.

The Standard Life shares are inside your capital gains tax limit of £8,800, so that's fine as well.

So no, you have nothing to declare, assuming you have no other capital gains, and no tax to pay on any of it, unless you are earning over the higher rate tax allowance (about £38,000), in which case you'll have to pay extra tax on the interest on the £20k (or what's left of it). For basic rate tax payers there's nothing to pay.

So in all likelihood, it's all yours, and Gordon Brown can keep his thieving hands off it.

26ltg

Many thanks for that - we can relax now