deposit and tax

Kimberley82

My dad is gifting my husband and I 100k for a deposit. My husband heard on the radio today that any gift over 50k was subject to tax, is this true?

Thrugelmir

Principle issue is that potentially that of Inheritance Tax if your father was to pass away within 7 years of making the gift.

Depending on circumstances may be other matters to consider as well.

Is your father going to live with you in the property ?

SouthCoast

And check out "deprivation of assets".

Kimberley82

Thrugelmir wrote: »

Principle issue is that potentially that of Inheritance Tax if your father was to pass away within 7 years of making the gift.

Depending on circumstances may be other matters to consider as well.

Is your father going to live with you in the property ?

Its very unlikely he will die in the next 7 years

Kimberley82

SouthCoast wrote: »

And check out "deprivation of assets".

what does that mean?

Who is depriving who?

holly_hobby

100k cash gift would result in IHT if the total estate on the donors death, (within 7 yrs of gift), including the value of all gifts in the PET period, exceeds the nil rate IHT band (currently £325,000).

Such a gift will be classed as a potentially exempt transfer (PET). As stated above, this gift will continue to form part of the donors estate for IHT purposes, for following 7 years from the date of gift. If the donor's death occurs within the 7 yr period (then on a sliding scale),and their estate including the value of the gift exceeds the nil rate IHT band - there will be IHT tax to pay.

Typical payment provision for such an event would be by effect a "gift inter vivos" policy - which is a single premium 7 year decreasing term assurance (with a sum assured equal to the estimated IHT bill in accordance with the decreasing liability over the 7 yr period). This policy is expressly used in IHT (PET)estate planning.

Already raised by another member regarding reduction of the donors assets - which may be an issue if the donor should seek future state funding for any long term care issues they may have. Long term care advice and possible provision would be a prudent consideration, as would general IHT/estate planning from a qualified professional .

Hope this helps
Holly

InMyDreams

Kimberley82 wrote: »

what does that mean?

Who is depriving who?

Easy way to check it out is google. Type "deprivation of assets" into the search bar and try the first link.

It may or may not be relevant in your case as you haven't given enough info to make any judgement, but worth reading up on in case it could be come relevant in the future.

(Oh, and to answer your question, your dad could be seen as depriving himself.)

Yorkie1

It is the term whereby if a person gives away some of their assets and then at a later date they require residential care, the council may argue that they have intentionally deprived themself of those assets, thus forcing the taxpayer to pick up the bill instead of the person. In that situation, the council will treat the person as if they still owned the assets.

Kimberley82

Yorkie1 wrote: »

It is the term whereby if a person gives away some of their assets and then at a later date they require residential care, the council may argue that they have intentionally deprived themself of those assets, thus forcing the taxpayer to pick up the bill instead of the person. In that situation, the council will treat the person as if they still owned the assets.

That will not be an issue, the money he is giving me is a drop in the ocean of what he has.

Kimberley82

InMyDreams wrote: »

Easy way to check it out is google. Type "deprivation of assets" into the search bar and try the first link.

It may or may not be relevant in your case as you haven't given enough info to make any judgement, but worth reading up on in case it could be come relevant in the future.

(Oh, and to answer your question, your dad could be seen as depriving himself.)

The money he is giving me is nothing compared to what he has.

Thrugelmir

Kimberley82 wrote: »

The money he is giving me is nothing compared to what he has.

Then there's nothing to concern yourself with.