Is there a maximum amount you can pay an individual?

Jbc

Not sure if this is the right forum for this question, but I wondered if there is a maximum amount you can pay an individual into their bank account?

For example, could you pay £25,000 into someone's personal account, or would you have to start completing paperwork/declaring it/the recipient has to declare it/tax etc?

Aquamania

Jbc wrote: »

Not sure if this is the right forum for this question, but I wondered if there is a maximum amount you can pay an individual into their bank account?

For example, could you pay £25,000 into someone's personal account, or would you have to start completing paperwork/declaring it/the recipient has to declare it/tax etc?

HMRC has no restriction as to how much money you may receive in your bank account.

You only have to declare it for tax if the money is taxable.
e.g. gifts are generally tax free (providing the donor lives for 7 years), as are lottery winnings.

purdyoaten

Aquamania wrote: »

HMRC has no restriction as to how much money you may receive in your bank account.

You only have to declare it for tax if the money is taxable.
e.g. gifts are generally tax free (providing the donor lives for 7 years), as are lottery winnings.

Gifts are always tax free.

pjclar02

purdyoaten wrote: »

Gifts are always tax free.

No they're not.


To the OP - what is the relationship between the two parties and the purpose of the payment?

purdyoaten

pjclar02 wrote: »

No they're not.


To the OP - what is the relationship between the two parties and the purpose of the payment?

You are correct to query the reason for the transfer of the money. However, in the UK, if the payment is a gift there will be no tax payable by either the donor or the recipient.

Of course, the gift could form part of the estate of the donor but, even then, it would be only under certain circumstances that any tax would be payable and that would be inheritance tax, not income tax.

May I enquire as to a circumstance where the gift would be taxable?

pjclar02

purdyoaten wrote: »

May I enquire as to a circumstance where the gift would be taxable?

Two instances spring to mind immediately

1) Lifetime transfers to a discretionary settlement; or
2) Donations made under gift aid when the donor is a non-UK taxpayer

Dead_keen

pjclar02 wrote: »

Two instances spring to mind immediately

1) Lifetime transfers to a discretionary settlement; or
2) Donations made under gift aid when the donor is a non-UK taxpayer

Another example would be if the gift related to someone's employment. For example, a shareholder giving money to a director after the sale of a business.

zygurat789

Dead_keen wrote: »

Another example would be if the gift related to someone's employment. For example, a shareholder giving money to a director after the sale of a business.

Or even any amount received from anyone other than the employer because of the employees job, ie a bottle at Christmas to the buyer, if declared on the P35)

CLAPTON

pjclar02 wrote: »

Two instances spring to mind immediately

1) Lifetime transfers to a discretionary settlement; or
2) Donations made under gift aid when the donor is a non-UK taxpayer

These are not gifts in any reasonable use of normal English.

pjclar02

CLAPTON wrote: »

These are not gifts in any reasonable use of normal English.

I would say the law (for example s260 TCGA92) would be considered to be a reasonable use of English. Maybe not "normal" use of English but unfortunately legally binding nonetheless

CLAPTON

pjclar02 wrote: »

I would say the law (for example s260 TCGA92) would be considered to be a reasonable use of English. Maybe not "normal" use of English but unfortunately legally binding nonetheless

No, in law gifts are tax free.

The fact that some 'gifts' are qualified makes them non gifts both in normal English and in s260 TCGA92
which is why they are taxed.