giving money away

atush

bowlhead99 wrote: »

I'd only mentioned it in my initial response because OP's only other thread was one about whether their ISA or ISA income would affect benefits.

And receiving xK from their mother might not be a taxable event, it would be savings that could affect any benefits received.

willywonka1

Hi all and thx,

Let me put it another way, my Mother had 50,000 in a savings account, she invests that in something, makes it up to 100,000, pays capital gains on what she made, and then decided to just it all to me, and it does not deprive her way of living in any way.

Wayne

Keep_pedalling

willywonka1 wrote: »

Hi all and thx,

Let me put it another way, my Mother had 50,000 in a savings account, she invests that in something, makes it up to 100,000, pays capital gains on what she made, and then decided to just it all to me, and it does not deprive her way of living in any way.

Wayne

Are you trying to say that if she gives you the £100k does that mean she no longer has to pay CGT?

If that is the question you are trying to ask, then that answer is no CGT will be payable based on the value on the date of the gift.

willywonka1

Hi there,

No, she who is over 80, had 50,000 in the bank, invests it, its then 100,000 pays CGT, then gives it to her Son, is that legal, would the Son have to pay any tax. thx for your time and help all.

Wayne

Eco_Miser

Post #2 gives a very full answer.
The short answer is the recipient of a gift pays no tax on that gift. The donor may in some circumstances (death or benefits claim) be treated as still having the money.

getmore4less

noggin1980 wrote: »

The way I understand it is your mum can gift you any amount she chooses along as it doesn't reduce the quality of life she currently has and that she doesn't die in the following 7 years (or some inheritance tax may be due on it, though even if she does die gifting it may well reduce the amount that needs to be paid depending how long she lived) and the money isn't being gifted to try and avoid paying care costs etc.

You can't give away 100k and say I have no money so I need help paying for care.

Taper relief only applies to very large gifts for most it all/nothing at 7 years for IHT.

It is vey rare for gifts to be due IHT the estate pays any tax due.

getmore4less

Steve_xx wrote: »

Yes, I'd say that's right. Though who would police such things as a reduction in her quality of life, I do not know.


Also, it's worth mentioning here that the Conservatives have mooted that they are likely to increase the Inheritance Tax Allowance up to £1m. That may have a huge beneficial impact on a lot of people.

Depends what you mean by a lot only 3% of estates pay tax an quite a few of those could have avoided it

mike88

willywonka1 wrote: »

Hi there,

No, she who is over 80, had 50,000 in the bank, invests it, its then 100,000 pays CGT, then gives it to her Son, is that legal, would the Son have to pay any tax. thx for your time and help all.

Wayne

If you believe you can invest £50k and turn that into £100k with little or limited knowledge then you should also be thinking of the more likely event of what would happen if £50k turned into £30k.

Encouraging an 80 year old to invest their life savings in the stockmarket in the belief that a quick buck can be made is unrealistic and misguided.

Steve_xx

getmore4less wrote: »

Depends what you mean by a lot only 3% of estates pay tax an quite a few of those could have avoided it

Perhaps so. But I would imagine that in London it is easy to overstep the £325k mark if you die and leave a property and some cash too. Property prices seem to be still on the rise and therefore as years go by the problem will become more apparent.

Steve_xx

mike88 wrote: »

If you believe you can invest £50k and turn that into £100k with little or limited knowledge then you should also be thinking of the more likely event of what would happen if £50k turned into £30k.

Encouraging an 80 year old to invest their life savings in the stockmarket in the belief that a quick buck can be made is unrealistic and misguided.

You've read far more into this question than was there. The OP asked a question about tax implications of transferring funds from mother to son. Now you've managed to read into that that he's encouraging her to have a bet!


The simple answer to his question is that his mother can give him what she likes within the confines of his original question. He will not have to pay income tax on the gift, but he would have to pay tax on any interest it earned if he banked it. If she dies within 7 years of the gift being made then the amount of the gift will be taken into account and if her total estate inclusive of the gift is greater than £325k then there may be some Inheritance Tax to pay. The amount that would have to be paid would reduce over the 7 year period.