'Income'?? Tax?? Help!!

Chaddee

I'm getting married next year and my Dad has very kindly said he'll pay for half the wedding costs. However, he lives in America and physically paying for things would be nigh on impossible! So he's going to put £10,000 into my account (in dribs and drabs) over the next few months, for me to use to pay for cake, dancing etc

Do I have to declare this as 'income'? And do I have to pay tax on it? I'm currently earning £27k, does this put me over the tax bracket? Help please!

Aegis

I think that the tax this would be subject to is inheritance tax rather than income tax. From what I remember, you would have to declare it as having passed to you if your father dies within the next 7 years according to UK law, but not otherwise.

Bear in mind thought that I've managed to get several facts like this wrong over the last few days, so my word is not exactly gospel... Plus there's the issue that some American law might apply too.

Chaddee

Thanks for such a quick reply. He is English, even though he lives in the States - would American law still be an issue?

Chaddee

Actually, don't worry, I think I've figured it out. Parents can give £5k exempt from inheritance tax specifically for a wedding, plus £3k for an annual allowance, plus the £3k of last year's allowance as long as they haven't used it yet (can only roll together 2 years though). So looks like I'm safe as long as he doesn't die in the next 7 years!

CLAPTON

There is no income tax implication... anyone can give you any amount they like without you having to declare it or pay income pax on it.

however, there is a potential liability to IHT if he
a. dies in the next 7 years and
b. has an estate over 300,000 (2007/8 value) and
c. doesn't leave most of it to his wife (spouses are exempt) and
d. the inheritance would come under UK tax law rather than US.
In this event, then it would be his estate that would be liable for the tax and not you personally.

However a parent can give a gift of 5k without IHT implications on the event of marriage so maybe your dad can give you 5k and your mum 5k?

Anyway, take and money and best of luck with the marriage.

RayWolfe

Chaddee wrote: »

my Dad has very kindly said he'll pay for half the wedding costs........he's going to put £10,000 into my account.......for me to use to pay for cake, dancing etc......do I have to pay tax on it?

You have had good answers on this so I hope you are measured, but if you can afford £20K on a wedding, you probably can afford to pay a bit of tax! :rotfl:

Chaddee

RayWolfe wrote: »

You have had good answers on this so I hope you are measured, but if you can afford £20K on a wedding, you probably can afford to pay a bit of tax! :rotfl:

That's just the point - my dad's putting up 10k, my mum's putting up 6k, and OH's parents are putting up 4k. Meantime fiance and I are saving very hard for the honeymoon and thanking God daily for having such amazingly generous, wonderful parents, without whom we'd be getting married in a much, much, much smaller way!!

Biggles

Chaddee wrote: »

I'm getting married next year and my Dad has very kindly said he'll pay for half the wedding costs. However, he lives in America and physically paying for things would be nigh on impossible! So he's going to put £10,000 into my account (in dribs and drabs) over the next few months, for me to use to pay for cake, dancing etc

Do I have to declare this as 'income'? And do I have to pay tax on it? I'm currently earning £27k, does this put me over the tax bracket? Help please!

I paid for my daughter's wedding in the States from here with no problem, I'm sure he could do the same.

All he has to do is phone up the venue (or cake, dress etc shop) with his credit card clutched in his hot little hand and they'll do the rest.

He'll probably pay a very small percentage (unless he has the US equivalent of the Nationwide CC) but it would probably be cheaper than transferring money through the banks and avoid you having to explain it to the IR.

RayWolfe

Stop right there!
It has already been explained that the is NO tax implication. Why would you want to ask the OPs people to commit a fraudulent act to evade a tax that does not exist?

jem16

I know there is not tax implication.

However what is fraudulent about paying for the reception by phoning from the US?

agal

RayWolfe wrote: »

You have had good answers on this so I hope you are measured, but if you can afford £20K on a wedding, you probably can afford to pay a bit of tax! :rotfl:

(my emphasis) Thanks, RayWolfe, I needed a good laugh! :rotfl: