£5,000 Gift

Dave_Donaldson

One of my very elderly relatives wants to gift me £5,000 which is very nice, but I'm unsure of the tax situation if he does so.
The £5,000 was originally in his will, but he wants me to have it early, so I can share it amongst my children/grandchildren and he can then see the good that the money can do.
My uncle is in receipt of state benefits with an estate worth no more than £15,000, and I'm a basic tax payer.

[Deleted User]

There are no tax implications on either of you in that case. There may be implications should he require nursing home care, for example. Does the figure of £15000 include his home?

Dave_Donaldson

He rents his home, so yes his total estate is about £15,000
Could the £5,000 gift be (wrongly) interpreted by the Benefits agencies as him keeping his bank balance below 'benefit related' limits?

agrinnall

Dave_Donaldson wrote: »

Could the £5,000 gift be (wrongly) interpreted by the Benefits agencies as him keeping his bank balance below 'benefit related' limits?

Yes it could, and they might well be right to do so. It may not be his intention but it could be the consequence of his action.

Keep_pedalling

It is unlikely to effect benefits such as pension credit as the very elderly will be under a a indefinite assessment period, so if the relative like my elderly mother is very frugal and their savings have grown over the last few years then they are not under an obligation to report those changes (even if they won the lottery)

With the current level of savings so low giving some away is not going to be an issue is care is required, however £15,000 is not a lot of money and I would want to keep most of that as an emergancy fund. I think I would encourage him to make smaller gifts directly to your children / GC.

Dave_Donaldson

'Keep pedalling' You are correct about pension credit. Just to be sure I've contacted HMRC and outlined the circumstances and they have said that it's his money and HMRC don't tell him how to spend it. He could drink, smoke or gamble it away, or as in this case gift it to a family member.