If a parent won the lottery, can they help their children

mnickels

If a parent was to win millions on the lottery, what is the best way to distribute the money without gift/ inheritance/ estate taxes creaming?

What are the thresholds for these taxes? I have seen 3k and 325k mentioned.

McKneff

There is no taxes on gifts of money. They can give it away to whoever they want. As long as, of course, they give it all away and then claim benefits. Nobody would be daft enough to do that, or would they.

Inheritance tax is a different matter, but deaths are involved. lol

mnickels

McKneff wrote: »

There is no taxes on gifts of money. They can give it away to whoever they want. As long as, of course, they give it all away and then claim benefits. Nobody would be daft enough to do that, or would they.

Inheritance tax is a different matter, but deaths are involved. lol

Thanks, I was under the impression from looking online that a gift tax of around 40-50% on gifts over 3k per year per parent was payable by the parent

I believe the reason was to stop avoidance of inheritance tax

StuC75

there can be tax implications,especially if person dies within so many years.. as thats why Syndicates need to have agreements in place to avoid such liability occurring..

Some people set up a family syndicate (that allows for such provisions to be made, e.g. I have 70% of total winnings with 30% then divided up as x to person 1, x to person 2).. signed at the start since retrospective agreements not allowed...

Mrs_Arcanum

An alternative is to have the win distributed as percentage shares to those you want to give money to as if they were part of a syndicate.

mnickels

StuC75 wrote: »

there can be tax implications,especially if person dies within so many years.. as thats why Syndicates need to have agreements in place to avoid such liability occurring..

Some people set up a family syndicate (that allows for such provisions to be made, e.g. I have 70% of total winnings with 30% then divided up as x to person 1, x to person 2).. signed at the start since retrospective agreements not allowed...

Barring death, are run of the mill payments taxed? For example if £10 million was won and the parent wanted to give £1 million to a child. Would it cost the parent approx £2 million (£1 million to child, £1 million to tax man)

If the parent received the money from other means can they still give large sums?

mnickels

Mrs_Arcanum wrote: »

An alternative is to have the win distributed as percentage shares to those you want to give money to as if they were part of a syndicate.

How would you prove this retrospectively?

MX5huggy

mnickels wrote: »

If a parent was to win millions on the lottery, what is the best way to distribute the money without gift/ inheritance/ estate taxes creaming?

What are the thresholds for these taxes? I have seen 3k and 325k mentioned.

Forget that it is a lottery win, to HMRC its just an asset

This covers gifts and the 7 year rule:-

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

ikkle87

have you won the lottery?

Mojisola

mnickels wrote: »

Barring death, are run of the mill payments taxed? For example if £10 million was won and the parent wanted to give £1 million to a child. Would it cost the parent approx £2 million (£1 million to child, £1 million to tax man)

McKneff wrote: »

There is no taxes on gifts of money. They can give it away to whoever they want.

As McK says - no tax to pay on gifts in the UK.

The giver might want to look at the implications of IHT.

mnickels

ikkle87 wrote: »

have you won the lottery?

I wish, just a conversation that developed when feeling philosophical in work