Cash gift to parents - any tax?

pcguy

I want to give my parents £6,000 via bank transfer. Would there be any tax to pay for this? I will be paying it into their current account so they will pay any tax on interest automatically as normal.

ariba10

You can give what you want to who you want.

The exceptions are if doing it to avoid inheritance tax or to deprive yourself of capital to claim allowances you would not have been entitled to.

Chris_P_2

No tax - you can do it it save IHT as well. £6000 will be covered by 2 annual exemptions

pcguy

Thanks for the replies. So it would be OK as one transfer then, or would it have to be split into two?

Mojisola

£6k could have an impact on any benefits they are claiming.

dan.date66

If you have not made any other gifts in this tax year or the previous, then the whole 6k is allowable as an IHT free gift. You don't need to separate it.

The 6k won't count as your parents' income, but as the previous poster intimated, it may affect any benefits they claim if it takes their capital over a certain threshold. You may need to check on it.

thenudeone

There is no tax on gifts in the UK, of any amount.

People often get confused by the rules which mean that if you die with 7 years, gifts you made during that period get added back into your estate for IHT purposes on a sliding scale, subject to several exceptions, one of which is gifts up to £3k pa; but this doesn't change the general position which is: there is no tax on gifts in the UK, of any amount.

Chris_P_2

thenudeone wrote: »

There is no tax on gifts in the UK, of any amount.

People often get confused by the rules which mean that if you die with 7 years, gifts you made during that period get added back into your estate for IHT purposes on a sliding scale, subject to several exceptions, one of which is gifts up to £3k pa; but this doesn't change the general position which is: there is no tax on gifts in the UK, of any amount.

yes there is. for one there could be CGT to pay as a "gift" is a disposal for CGT. And any gift that takes the cumulative gifts in the previous 7yrs over £325,000 could attract an IHT charge if it is deemed a CLT.

CLAPTON

Chris_P wrote: »

yes there is. for one there could be CGT to pay as a "gift" is a disposal for CGT. And any gift that takes the cumulative gifts in the previous 7yrs over £325,000 could attract an IHT charge if it is deemed a CLT.

what is a CLT?

dan.date66

Chargeable lifetime transfer. As opposed to PET which is a potentially exempt transfer.

thenudeone

Chris_P wrote: »

yes there is. for one there could be CGT to pay as a "gift" is a disposal for CGT. And any gift that takes the cumulative gifts in the previous 7yrs over £325,000 could attract an IHT charge if it is deemed a CLT.

If someone gifts an asset on which there has been a capital gain, the seller (but not the receiver) may be liable to CGT if it's not exempt and it's over the annual allowances, but that's nothing to do the gift, and the tax isn't payable by the receiver. The same tax would be payable if they sold the asset rather than gave it away, so it's not a tax on the gift.

I already mentioned the possibility of an IHT charge at some future date. Although in this case the amount mentioned would be an exempt transfer if no other gifts had been made in this or the previous tax year, the since the unused allowance can be carried forward from last year.

There is no tax on a gift. I can't make it any clearer.