Attendance Allowance Tax

terrymoneysavingexpert

Hi
My mother gets Attendance Allowance paid directly to herself.
My brother cares for my mum and we would like to give him the money my mum gets.
Will he be taxed on it?
Or does he have to declare it to tax office?
She is 88 and has no other income.
He is 68 and has no other income.
Thanks Terry

pmlindyloo

terrymoneysavingexpert wrote: »

Hi
My mother gets Attendance Allowance paid directly to herself.
My brother cares for my mum and we would like to give him the money my mum gets.
Will he be taxed on it?
Or does he have to declare it to tax office?
She is 88 and has no other income.
He is 68 and has no other income.
Thanks Terry

When you say your mum has no other income do you literally mean no other income. Does she get a state pension?

And your brother?

I am asking because there are other benefits that they both may be able to apply for without your mum giving up her attendance allowance.

How are they supporting themselves?

HOWMUCH

Same thread again? Why

p00hsticks

terrymoneysavingexpert wrote: »

Hi
My mother gets Attendance Allowance paid directly to herself.
My brother cares for my mum and we would like to give him the money my mum gets.
Will he be taxed on it?
Or does he have to declare it to tax office?
She is 88 and has no other income.
He is 68 and has no other income.
Thanks Terry

I'm not sure why you've chosen to start a new thread on this topic rather than add to the original, unless you feel it's gone off track because you originally referred to Carers Allowance rather than Attendance Allowance - for the record, here is the other one

https://forums.moneysavingexpert.com/discussion/5321605

Attendance Allowance isn't a taxable allowance so your mother (as the recipient) doesn't need to pay tax on it.

If she then chooses to give it to your brother then I would imagine it counts as a gift, which isn't taxable, although I guess HMRC could see it as a regular amount in return for services then it's taxable - it might be worth double-checking over on the tax board.

http://forums.moneysavingexpert.com/forumdisplay.php?f=22


Whether it's taxable or not is really relevant if your brother really does have no other income and has the standard tax code.

But to repeat a question from your original thread which you never answered

Q. You say both your mother or brother have no other income - Why are neither of them receiving a state pension ?

And to repeat a comment made on the previous thread ...

If your brother is carer for your mother for more than 35 hours a week, then he is likely to have an underlying claim to Carers allowance which could see him able to claim further benefits such as Pension Credit which might help him financially.

terrymoneysavingexpert

Hi
I started a new thread as people were still replying to my original questions which was carers allowance even though I changed the post. So I thought it best to start again as it was confusing, I am new to all this.

Both my mother and brother get state pension, but have no other incomes.

All I am interested in is whether my brother has to declare it to someone if he gets it regularly, as she has already given us gifts of £1000 per person this year.

Thanks Terry

pmlindyloo

terrymoneysavingexpert wrote: »

Hi
I started a new thread as people were still replying to my original questions which was carers allowance even though I changed the post. So I thought it best to start again as it was confusing, I am new to all this.

Both my mother and brother get state pension, but have no other incomes.

All I am interested in is whether my brother has to declare it to someone if he gets it regularly, as she has already given us gifts of £1000 per person this year.

Thanks Terry

Everything you need to know here:

http://www.saga.co.uk/magazine/money/personal-finance/giving/tax-and-gifting-money-to-children.aspx

10pence

terrymoneysavingexpert wrote: »

Hi
My mother gets Attendance Allowance paid directly to herself.
My brother cares for my mum and we would like to give him the money my mum gets.
Will he be taxed on it?
Or does he have to declare it to tax office?
She is 88 and has no other income.
He is 68 and has no other income.
Thanks Terry

terrymoneysavingexpert wrote: »

Hi
I started a new thread as people were still replying to my original questions which was carers allowance even though I changed the post. So I thought it best to start again as it was confusing, I am new to all this.

Both my mother and brother get state pension, but have no other incomes.

All I am interested in is whether my brother has to declare it to someone if he gets it regularly, as she has already given us gifts of £1000 per person this year.

Thanks Terry

Yes, as it would be for services rendered - in this case for caring services.

p00hsticks wrote: »

Attendance Allowance isn't a taxable allowance so your mother (as the recipient) doesn't need to pay tax on it.

If she then chooses to give it to your brother then I would imagine it counts as a gift, which isn't taxable, although I guess HMRC could see it as a regular amount in return for services then it's taxable - it might be worth double-checking over on the tax board.

http://forums.moneysavingexpert.com/forumdisplay.php?f=22


Whether it's taxable or not is really relevant if your brother really does have no other income and has the standard tax code.

It will be an issue if it takes that person over the tax free allowance.

But to repeat a question from your original thread which you never answered

Q. You say both your mother or brother have no other income - Why are neither of them receiving a state pension ?

And to repeat a comment made on the previous thread ...

If your brother is carer for your mother for more than 35 hours a week, then he is likely to have an underlying claim to Carers allowance which could see him able to claim further benefits such as Pension Credit which might help him financially.

If the mother gives the son the AA for services such as caring for her then it could be considered taxable income for the son: thus need declaring as son is employed by the mother and if it takes the son over their tax free threshold then it could cause issues.


The son is in receipt of state pension and therefore cannot claim carers allowance: LINK

nannytone_2

if he were to be 'employed' by the mother, she would need insurance and would have to be paying minimum wage.
whereas, if he were her carer and she gifts him this money, it is no one else business

terrymoneysavingexpert

Thank you all for your comments.
Just to summarise.
My mum receives the £55 AA each week.
She pays the same amount to my brother as a gift each week.
She is not near the Inheritance limit.
My brother only receives a state pension and no other income, so he will be nowhere near the personal tax threshold.
He cannot claim carers allowance as he receives a state pension.

One thread above says
"if he were her carer and she gifts him this money, is no one else business"
the other says
"although I guess HMRC could see it as a regular amount in return for services then it's taxable"

What should he do?

Thanks again, Terry

Mojisola

terrymoneysavingexpert wrote: »

T
My brother only receives a state pension and no other income, so he will be nowhere near the personal tax threshold.

Why hasn't he claimed Pension Credit?

He cannot claim carers allowance as he receives a state pension.

Yes, he can. He won't get the full amount but he will get some extra.

pmlindyloo

Without knowing all the full circumstances we are just making 'stabs' at what your brother and mum should be doing.

We need to know exactly how much in state pension/any other income that both your mum and brother are getting. Also in what type of housing they are living - mortgaged/private accommodation/owned home. Plus, do they each have a partner/anyone else living with them?

It is possible that both your mum and brother should be claiming some other benefits to raise their incomes.

Without this information we cannot help you.

It is possible that your mum would not have to give up her AA if their benefits could be sorted.