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Large Gift - will it affect tax credits
ukjoel
Posts: 1,468 Forumite
Hi,
We receive working tax credits and child tax credits at present.
As far as I am aware none of the tax credits we receive require us to disclose any savings, only earnings.
We have been given a gift of 20k by the parents and I wanted to check what if any impact this would have.
My research so far leads me to believe we DONT need to inform anybody of this gift (as long as they dont die within 7 years) and only need to declare as income any interest we receive from this gift if we put it in the bank.
I wanted to check if this was correct and also enquire as to how they treated interest from savings. Do they use this figure to identify if someone has X amount of savings and then reduce their tax credits as a result?
Many thanks in advance.
We receive working tax credits and child tax credits at present.
As far as I am aware none of the tax credits we receive require us to disclose any savings, only earnings.
We have been given a gift of 20k by the parents and I wanted to check what if any impact this would have.
My research so far leads me to believe we DONT need to inform anybody of this gift (as long as they dont die within 7 years) and only need to declare as income any interest we receive from this gift if we put it in the bank.
I wanted to check if this was correct and also enquire as to how they treated interest from savings. Do they use this figure to identify if someone has X amount of savings and then reduce their tax credits as a result?
Many thanks in advance.
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Comments
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My research so far leads me to believe we DONT need to inform anybody of this gift (as long as they dont die within 7 years) and only need to declare as income any interest we receive from this gift if we put it in the bank.
You're muddling tax credit regulations, with inheritance tax rules
As long as the donor of the gift survives 7 years, there is no IHT to pay (sorter than that there is a sliding scale).
You do need to declare the interest on the gift to HMRC. Interest over £300pa will be taken into account in your tax credit calculation.:rudolf: Sheep, pigs, hens and bees on our Teesdale smallholding :rudolf:0 -
With tax credits, it's taxable interest of £300 or more per year.Sealed pot challenge #232. Gold stars from Sue-UU - :staradmin :staradmin £75.29 banked
50p saver #40 £20 banked
Virtual sealed pot #178 £80.250 -
indeed, its the interest that they're concerned with'We're not here for a long time, we're here for a good time0
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You dont need to declare the amount for tax credit purposes, only the income received in interest. Even then you only need to declare any annual interest you received above £300.00.I no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.0
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Just to make it clear - for tax credits it is only taxable income that is taken into account.
So it is any TAXABLE interest that needs to be declared for tax credits. Savings in an ISA, for example, are not declarable because the interest is not taxable.I'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.0 -
Fantastic - thats brilliant - Thanks very much.0
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