Cash gift for deposit

Duffinya

Hi there

I can get a gift of cash from my parents, who do not expect a return or interest in it or the flat.

I am trying to understand, if anything should happen in 7 years, am I right in thinking that I would have to pay inheritance tax on it? that being 40% of it (that is crazy amount!!!)?

what is the deal?? it will be around 50k

Thanks for your info in advance
:eek:

CloudCuckooLand

http://www.hmrc.gov.uk/inheritancetax/
http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm#4

40% may be considered crazy by some. But what other tax would you prefer to pay to make up for it, if it was reduced?

60% income tax?
Double council tax?
Extra fuel duty?

poppysarah

How much have you saved yourself?

N79

CloudCuckooLand wrote: »

http://www.hmrc.gov.uk/inheritancetax/
http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm#4

40% may be considered crazy by some. But what other tax would you prefer to pay to make up for it, if it was reduced?

60% income tax?
Double council tax?
Extra fuel duty?

theartfullodger wrote: »

As CCL (Νεφελοκοκκυγία or Nephelokokkygia) says...

You're a very privileged person with extremely generous parents who we all hope live for many many more years.. But yes, should they die some may need to be paid back.

Surely the British way is to pay taxes due promptly & with good humour??

Cheers!

Artful

Ach you two. Welcome to the Soviet Socialist republic of Great Britain. Inheritance tax is for the gullible or the naive only (or those with large personal property holdings which are harder to deal with).

OP - if inheritance tax is a serious issue off to a tax lawyer you and your parents go. It is fairly easy to avoid inheritance tax.

Richard_Webster

A loan of £50K made now can be written off by parents at the rate of £3K per year person so in 7 years (7x 3 x 2=42) only £8K remains.

sonastin

and only if the estate including the outstanding amount of the gift is above the threshold for IHT - although if they can afford to give you £50k I guess its highly likely that it is?!

fozzeh

sonastin mentioned the key thing at last; if the £50k is any part over the threshold, then IHT will have to be paid. This depends on if (unfortunately) how many parents were to die and how many years later. The IHT rate is tappered down between the 1st and 7th year between gift and death.

tyllwyd

Well, assuming that your parents estate is over the inheritance tax threshold, and that you would be the only beneficiary of the estate, if they didn't give you the money now the IHT on that £50K would have to be paid by the estate anyway, so your inheritance would be that much less, so in that sense it wouldn't make any difference. You've got more chance of not paying the tax if they give you the money now than if they keep it.