Buying a car on behalf of my parents

Fogmeister

Due to bad credit my parents would not be able to get finance on a car.

If I got the car finance in my name (and registered the car in my name) and my parents transferred money equivalent to the finance payments each month. Would I then be liable to income tax?

Would this come under the "gift" thing and therefore be exempt from Income Tax?

If it matters at all I would be able to make the payments on the car regardless of whether they give me the money or not.

nomunnofun

There are no taxes on gifts in the UK - probably the most asked question on this forum.

There could be an inheritance tax issue where your parents estates be worth £650000 or more in aggregation. However, it should be simple to ask your parents to sign a piece of paper which outlines what the payments to you represent i.e. not a gift.

CLAPTON

no taxes
but make sure you sort the car insurance out OK

getmore4less

The payments are not gifts.

They are debt payments. or payments for the use of a car if you retain ownership.

The issue will be can you capitalize the interest.

If they are the users/keeper of the car it should be registered at their address.

Registered keeper and benificial owner don't have to be the same person.

thenudeone

Just be careful that the insurance company and the finance company are aware and acknowledge the situation, otherwise I can see problems coming.