Should I pay tax on regular money from parents?

[Deleted User]

HappyMJ wrote: »

£1 million....there is no limit. No tax due however if they were to die then you may be liable to inheritance tax on any gifts in the last 7 years or so.

only if the gifts totaled £3k in any one year,anything under that doesnt get hammered by iht

zzzLazyDaisy

real1314 wrote: »

Does anyone on this thread actually have any real knowledge of the regulations that apply to voluntary payments / income?

What the OP has suggested is most definitely a Voluntary Payment; Nothing is expected in return.

It doesn't affect IS/JSA/ESA/HB/CTB/PC-GC

:cool:

You are correct if you are referring to voluntary maintenance payments by the father of a dependent child, to its mother. However, regular monthly payments by other people can be classed as income, and in my personal knowledge have been classed as income on at least one occasion, for LHA.

If you are able to provide a reference to the regulations which state that regular voluntary payments from ANY source must be disregarded, then I will be very happy to be proved wrong, but in my experience it really isn't as simple as that.

[Deleted User]

reading this thread got me thinking will asil nadir(polly peck fraud trial)who allegedly defrauded his companies of £150m in the 80s and is just standing trial,face months in prison as some benefit frauds have,and be expected to repay all he "allegedly"fiddled even if he cant afford to(as most benefit fraudsters have to)?or will it be a different rule for a the former darling of capitalism?

Dognobs

Can't beleave you all fell for this troll!

rogerblack

real1314 wrote: »

Does anyone on this thread actually have any real knowledge of the regulations that apply to voluntary payments / income?

What the OP has suggested is most definitely a Voluntary Payment; Nothing is expected in return.

It doesn't affect IS/JSA/ESA/HB/CTB/PC-GC

:cool:

See post 9.
http://forums.moneysavingexpert.com/showpost.php?p=50496661&postcount=9

In short - yes, it's a Voluntary Payment, and therefore a Relevant Payment.
But as parents are Liable Relatives, that makes it a Liable Relative Payment, which is excluded from being a Relevant Payment, and hence not exempt.

sue1953

From the Decision maker's guide

What are voluntary payments
28493 A voluntary payment is a payment that
1. has a benevolent purpose and
2. is given without anything being given in return

Note: Voluntary payments should not be confused with payments to volunteers.
Guidance on payments to volunteers is given at DMG 26195 - 26196.
1 R(IS) 4/94
28494 A voluntary payment is similar to a charitable payment but it will not usually be made
from a charitable trust. Voluntary payments are usually paid for the benefit of an
individual. But DMs should recognize that charitable payments may also be made to
individuals
1. for the relief of poverty or
2. because a wider purpose is involved.


28495 The DM should consider
1. the background to and
2. reasons for
the payment when deciding if it is voluntary.
Example 1
Jim claims JSA. He declares that he gets a payment of £20 a week from his uncle,
Peter, towards the cost of running his car.
Peter makes the payment because Jim has been receiving JSA for some time and
needs a car to get around.
Peter makes the payment because of family ties and affection for Jim. Peter does
not expect or receive anything in return.
The DM decides that the £20 is a voluntary payment.
Example 2
Frances claims IS. She is retired and receives a payment of £4.50 a week from her
former employer in addition to her occupational pension.
The payment of £4.50 is paid to all former employees who worked for the company
for over 20 years.
The payments were awarded by the board of directors following criticism by
shareholders of the treatment of former employees with long service.
The DM decides the payment is not voluntary. This is because
1. the directors of the company are receiving in return for the payment greater
satisfaction from the shareholders
2. the company's image is improved
3. the payments are not made to help needy employees. Many of the people
receiving payments are quite well off


I once helped a client who was getting a regular voluntary payment from his brothers and it was being deducted from his income-based Jobseekers Allowance. I argued that it was a voluntary payment and should not be taken into account when assessing his entitlement to JSA. JCP eventually agreed with me and the payment from his brothers was disregarded.

2sides2everystory

Is understanding on this thread suffering from wrong interpretations by people who should know better ?


First someone indicates that other voluntary payments i.e. even those not from liable relatives can (should?) not be disregarded.

Then someone blankets all parents (even grandparents in this case) as "Liable Relatives" - that is surely complete tosh. The only reason the word parent appears in the definition that I can see is in the case of one absent parent making a contribution to the remaining single parent household. It isn't meant for Mums and Dads helping out grown children with their households, now is it?

Then Sue1953 posts an excerpt of the DWP Decision Makers Guide on the topic which looks to me to include an example where Jim's uncle Peter could just as well be Jim's old Mum or Dad i.e. the voluntary payments made only out of affection and to alleviate the affects of low income and made charitably need not be taken into account. But the example only mentions a regular twenty quid :rotfl:

And Sue1953 herself says she argued successfully for such payments by a claimant's brothers to be disregarded.

So can someone with a bit of nouse on the subject please recap ? The message from this thread is currently all over the place and from what I can deduce now, the answer to the OP could perhaps have been "It's not a problem - it's just your Mum & Dad, helping you out ! It's perfectly normal."

rogerblack

2sides2everystory wrote: »

Then someone blankets all parents (even grandparents in this case) as "Liable Relatives" - that is surely complete tosh. The only reason the word parent appears in the definition that I can see is in the case of one absent parent making a contribution to the remaining single parent household. It isn't meant for Mums and Dads helping out grown children with their households, now is it?

Then Sue1953 posts an excerpt of the DWP Decision Makers Guide on the topic which looks to me to include an example where Jim's uncle Peter could just as well be Jim's old Mum or Dad i.e. the voluntary payments made only out of affection and to alleviate the affects of low income and made charitably need not be taken into account. But the example only mentions a regular twenty quid :rotfl:

The payments are indeed voluntary payments.
These voluntary payments are 'relevant payments'.
Relevant payments are disregarded, except in certain cases. The payment being by a 'liable relative' is one.

The brother, or uncle is not a liable relative, and hence their payments are disregarded.

On further reading - the parent is only a liable relative if the claimant is 19 or younger, which seems unlikely in this case.
I should have plowed on further through the chain.

Apologies for any distress caused.

2sides2everystory

In six days God made the world, DMGs, Statutory Instruments, defined a couple of potentially Liable Parents and on the seventh he sat back a bit and had a little think ... and lo, there was light ! (and enlightenment )

Thanks Roger

zzzLazyDaisy

rogerblack wrote: »

Relevant payments are disregarded, except in certain cases. The payment being by a 'liable relative' is one.

This also does not make sense, as voluntary maintenance payments by a non resident parent of a dependent child to the parent with care are disregarded (usually, but not always, by the father to the mother of a child under the age of 19yrs and in full time education).