Being purchased a house as a gift... implications?!

pixiescar

Hello!

My Father-in-law is purchasing a house for myself and my husband as a gift. We've checked the IHT and CGT laws and aware of them.

The only thing we're having difficulty with is that the financial solicitors have requested that the money go through my husband's bank account as his Father's is not considered to be a UK bank account (it's Isle of Man).

We are both self employed and receive working tax credits (which is part of the reason he's so kindly buying us a property, as we are struggling trying to get on the property ladder).
I'm worried that if my Father-in-law gifts us money into a bank account, we will be liable to be taxed through our self employment earnings or lose our WTC. I am trying to earn enough to be able to go without any WTC and they have been cut year and year.
I would be happier to cancel our WTC in advance rather than be penalised in the future. Also... is it likely to affect our Self Assessment.?

I've tried the HMRC website and a vast number of other sources, including our property solicitor and we're not getting any clear answer.
Any guidance... or links would be gratefully received.

Cheers! x

Lord_Baltimore

To get definitive advice, you'd be better off asking HMRC. You're not trying to hide anything but anyway they have online advisers you can 'speak' to without divulging your name. Better to get it from the horse's mouth so you don't get caught out at some future date.

davidmcn

Any more detail about the "UK bank account" point? Seems odd to me - the solicitors still need to do the same money-laundering checks to confirm the ultimate source of the funds. Putting it through a UK account doesn't make the money any "cleaner".

POPPYOSCAR

The money is not your income it is a gift which is deemed to have income tax already paid on it. So it would not be added to your earnings.

Presumably it will be a lump sum going into the account and more or less straight out again to pay for the property.

I cannot see a problem here.

pixiescar

Brilliant.

Thank you all for your advice.
I have now found the correct HMRC call line to call tomorrow and ask about implications.
We're not trying to hide anything at all, but just don't want to miss the wrong tick box and end up stung by accident!
It shall be going in and out in one lump sum. From what I have read, as it is our Father-in-law's gift, we just need to have a letter witnessed and signed to that effect so that if (*fingers crossed* this doesn't happen) he passed away in 7 years, we and the rest of the estate beneficiaries are not left with a large IHT bill!

Cheers all! This forum is always great help!