Declaring a Gift

amitl

Hi,

I am receiving a 20k gift from a family member soon.

I do not receive any benefits and have FT employment.

Do I need to declare this gift to HMRC?

Also, what is the best way to prove it is a gift?

Thanks

purdyoaten

No declaration necessary - no tax on gifts in the UK.

Get the donor to state that is a gift i.e. not repayable and keep the documentation. Most good accountants will ask for this in order to ensure that granny's gift should not be included in self-employed accounts, for example.

zygurat789

amitl wrote: »

Hi,

I am receiving a 20k gift from a family member soon.

I do not receive any benefits and have FT employment.

Do I need to declare this gift to HMRC?

Also, what is the best way to prove it is a gift?

Thanks

No and it can be evidenced by a letter from the donor to the recipient stating it is a gift.

TadleyBaggie

You don't have to prove anything, there is no tax liability on gifts. However if the person giving you the gift were to die within 7 years, then the value of the gift would have to be taken into account when inheritance tax was being calculated for the estate.

zygurat789

TadleyBaggie wrote: »

You don't have to prove anything, there is no tax liability on gifts. However if the person giving you the gift were to die within 7 years, then the value of the gift would have to be taken into account when inheritance tax was being calculated for the estate.

"You don't have to prove anything" to HMRC maybe but the OP may want to prove it somewhere else or just want added comfort.

danny1931_2

No tax on gifts unless it subsequently forms part of your relatives estate if they die within 7 years & only then if estate is over inheritance tax threshold.


Just be mindful of money laundering regulations in that your bank will report a large deposit so some proof of the gift may be useful to show where it came from in case HMRC come sniffing thinking it's undeclared earnings

CLAPTON

danny1931 wrote: »

No tax on gifts unless it subsequently forms part of your relatives estate if they die within 7 years & only then if estate is over inheritance tax threshold.


Just be mindful of money laundering regulations in that your bank will report a large deposit so some proof of the gift may be useful to show where it came from in case HMRC come sniffing thinking it's undeclared earnings

the bank may or may not report a large deposit

20k isn't a large amount to deposit

kidmugsy

Getting an explanatory letter is sensible in case, for instance, you want to take out a mortgage and the bank/BS wants to know where your deposit comes from.