Money Gift from Dad

Frannieannie

Hi, my Dad whose 85 has decided that his house and living on his own is too much for him. Next month he is going to sell up and the plan is to move in with me and my family.
He would also like to give my sister and I £100,000 each from the sale of his house, and he keeps any remaining money from the sale.
I plan to pay a chunk off my mortgage and my sister is going to buy her house.
My question is what are the tax implications of this gift if any?
Thank you

LilElvis

Frannieannie wrote: »

Hi, my Dad whose 85 has decided that his house and living on his own is too much for him. Next month he is going to sell up and the plan is to move in with me and my family.
He would also like to give my sister and I £100,000 each from the sale of his house, and he keeps any remaining money from the sale.
I plan to pay a chunk off my mortgage and my sister is going to buy her house.
My question is what are the tax implications of this gift if any?
Thank you

If he dies within 7 years of making the gift then the money would be considered as part of his estate and therefore potentially liable to Inheritance tax. It's going to depend on the total value of his estate.

Have you, or he, considered what would happen if he needed to move into a nursing home in the future? Would he have sufficient funds remaining to pay for it?

Keep_pedalling

There is no immediate tax issue, and if he lives 7 years after gifting the money it could save his estate a considerable amount of tax.

Do you have a rough idea of the value of his home and other assets? Is he a widower?

Pollycat

LilElvis wrote: »

If he dies within 7 years of making the gift then the money would be considered as part of his estate and therefore potentially liable to Inheritance tax. It's going to depend on the total value of his estate.

Have you, or he, considered what would happen if he needed to move into a nursing home in the future? Would he have sufficient funds remaining to pay for it?

The OP needs to Google 'deprivation of assets' re the bit in bold.

Keep_pedalling

Pollycat wrote: »

The OP needs to Google 'deprivation of assets' re the bit in bold.

Only if the £200k gift leaves him with very little assets. The OP has said he intends to retain the rest of the money raised from the sale, and we currently don't know how much that is, what other assets he holds, and what sort of pension income he has.

With out that info it is a bit premature to raise the DoA issue.

Pollycat

Keep_pedalling wrote: »

Only if the £200k gift leaves him with very little assets. The OP has said he intends to retain the rest of the money raised from the sale, and we currently don't know how much that is, what other assets he holds, and what sort of pension income he has.

With out that info it is a bit premature to raise the DoA issue.

Pollycat wrote: »

The OP needs to Google 'deprivation of assets' re the bit in bold.

I posted this ^^^^ so the OP could look into it in the absence of more information about her Dad's finances.
I didn't say it would apply in these specific circumstances.

Frannieannie

Thank you for all your advice. I spoke to him this afternoon and he says his total assets are a bit below 350k.
I hope I'd never have to put him in a home. If his current good health was to deteriorate I'd prefer to have help at home or give up work myself.

Keep_pedalling

Frannieannie wrote: »

Thank you for all your advice. I spoke to him this afternoon and he says his total assets are a bit below 350k.
I hope I'd never have to put him in a home. If his current good health was to deteriorate I'd prefer to have help at home or give up work myself.

I don't think DoA is a problem in this case, you father is clearly doing this both for his own wellbeing and to give both children financial assistance, and Is also planning to maintain sufficient assets for his own needs.

The fact that he will be living with his daughter and not on his own also reduces the risk of him ever needing residential care, as for the original question there are absolutely no tax issues here, there are no gift taxes in the UK and currently his estate falls below the IHT threashold, so there are no tax advanvantages either.