Tax implications - gifting deposit ?

Shiloe

Hi everyone my parents are planning on giving money when I apply for a mortgage which I will be declaring as a gifted deposit (I will have my own capital also)

However does anyone know any tax implications of gifted deposits ? (assuming there are any?) I know of the 7 year inheritance tax rule does this apply and is there anything else we should be aware of ?

Thanks

kingstreet

No. That's it.

Potentially exempt transfer for IHT if either of them die within seven years of the date of the gift and the total value of the estate (inc the PET) exceeds the nil rate band(s).

holly_hobby

There is no tax on actual gift - but as you state there could be IHT implications.

If its 2 parents, and they haven't made any gifts last yr or this to you, then you could exclude 12k of the gifted deposit under annual exempt gift allowances (3k per person per yr, with a carry fwd of 1 yrs unused relief - hence the 12k I mention).

If its a wedding gift ? this is increased to 5k.

Anthing in excess of the exempt amount is a PET (which is potentially exempt if the donor survives for 7 yrs post donaton, if the donor dies within the countdown period it isn't completely excluded).

This is all relevant if your parents net estate on 2nd death will exceed 650k (if there is full unused spousal tsf available on death of 2nd parent).

Hope this helps

Holly

Shiloe

Thats great thank you for your quick in depth replies !