Tax implications of giving large sums of money to family member

autojumbled

Hi All, first time posting on here but certainly not the first time I've used MSE for great money info!

I am in a position where I am going to be selling a property and the plan is to give the majority of the proceeds to my mother (£100K+).
Are there tax implications with a transfer of this size?

Many thanks

le_loup

Not unless you are planning to die soon.
But you can search on here for the thousands of similar threads.

xylophone

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

calypso_rhapsody

No implications for you ... but it is rather contrary to normal IHT planning to be gifting assets 'up' the generations .... you should check that there is no risk of her estate (assuming she dies before you) exceeding the IHT threshold so that when (if?) you inherit your £100k back it will have been taxed within her estate?

autojumbled

Thanks for all the replies, the HMRC pages will provide some interesting reading.

The cash is planned to be spent on building a house for grandparents so I do not think it will be coming back my way in terms of inheritance.

bobthedambuilder

I think it's very generous of you to provide funds for a house for your grandparents.:T

It is still worth investigating the IHT implications, be it for your mother or your grandparents. The house will be an asset to be passed down the inheritance trail eventually, so you may well stand to benefit.

autojumbled

bobthedambuilder wrote: »

I think it's very generous of you to provide funds for a house for your grandparents.:T

Well if a family can't stick together and support each other then what's the world coming to!

As you say though, thinking about it I may stand to inherit something so it may come my way again eventually (after being taxed to high heaven of course)

calypso_rhapsody

Good for you for supporting your family in this way!

But it may well be worth just taking a look at whether there is a more tax efficient way of doing it - eg you could own a share of the house maybe? am not a tax expert at all but if i were in your shoes i would be trying to make sure that it was structured in a way that did not give the Revenue any more than they need to have! Of course if your grandparents and their inheritors have small estates it may be a non-issue ....

getmore4less

It's not just IHT tax, don't forget the funding of care issues.

Rather than own part of a house which has CGT implications there is always a interest free load structure.

xylophone

It might be an idea to explore the possibility of making an interest free (but index linked) loan to your grandparents, repayable on sale (or whatever contingency you choose), and taking a first charge on the house. You and they would need to consult a solicitor.