Help with mortgage

bermary

My o/h and myself are both in our mid seventies and have between us approx. £200.000 in savings,our daughter is hoping to purchase a new house and is about 5 to 6 thousand short of the money she requires, would we be ok to give her this money to help her and would there be any complications in doing this.

xylophone

Are you concerned about gifts/IHT ?
See http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

bermary

We just want to know if we can give her this money to help her out now as she will get half of our money, other half going to our son when anything happens to us,we have no other assets and live in rented accomodation but believe it would be better for her to get some of the money now when she can put it to good use and needs it.

Stubod

Hi there,

I think that officially you are restricted how much money you can "give away" without paying tax...I think about 3k per individual per year.

ie I assume that this means that both you and your wife could give your daughter 3k each = 6k. (If I am wrong I am sure somebody will post).

However in the grand scheme of things, if you are happy to let your daughter have the money I would just take it out in cash and do it. (I assume at some point it is your intention that she will get it any way, and the total amount you have is well under the inheritance tax threshold, particulalry if you have no other major assets...ie house to include.

StevieJ

Can't see any problem personally as your funds are well under the inheritance tax threshold of £325k.

CLAPTON

there is no tax on gifts in the UK

if your total combined estate (i.e. you and your spouse) is over 650,000 the inheritance tax may be an issue


but if your estate is less than that then you can give as much as you like away without any tax concerns

CLAPTON

Stubod wrote: »

Hi there,

I think that officially you are restricted how much money you can "give away" without paying tax...I think about 3k per individual per year.

ie I assume that this means that both you and your wife could give your daughter 3k each = 6k. (If I am wrong I am sure somebody will post).

However in the grand scheme of things, if you are happy to let your daughter have the money I would just take it out in cash and do it. (I assume at some point it is your intention that she will get it any way, and the total amount you have is well under the inheritance tax threshold, particulalry if you have no other major assets...ie house to include.

there is no gift tax in the UK; the '3000' you quote has some relevance to inheritance tax but that doesn't not seem to be an issue here

oldvicar

bermary wrote: »

We just want to know if we can give her this money to help her out now as she will get half of our money, other half going to our son when anything happens to us,we have no other assets and live in rented accomodation but believe it would be better for her to get some of the money now when she can put it to good use and needs it.

If you can afford it you might think it fair to give your son a similar amount at the same time.

xylophone

The OP and spouse seem to be well within the IHT threshold so IHT is not a consideration at this stage and there is no need for the donor or recipient to worry about gift tax (none in UK) or income tax ( a gift is not income). Even were IHT a consideration they could each gift £3000 in accordance with HMRC rules in link.

However, while tax is not a concern, it might be necessary to counsel some caution if either the OP or spouse (or both) were currently in poor health and likely to need residential care in the near future. They don't own a house but do have capital so might just want to cast an eye over "deprivation of capital" in
http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS10_Paying_for_permanent_residential_care_fcs.pdf?dtrk=true

bermary

Thankyou all for your replys,and of course I intend to do the same for my son,they will both finish up treated equally