gifted money from relatives

Prish

Hi all,

Does anyone know what the process is from a tax point of view for receiving a gift of money over £20k from family which will be used as a deposit for a house purchase? The gift does not need to be paid back.

Is inheritance tax applied on this? Does the 7 year rule come into effect?What is the process of HMRC on this?

Does anyone know much about this?

Any advise would be much appreciated.

Thanks

Prish

theartfullodger

7 Year rule applies - see
https://www.gov.uk/inheritance-tax/gifts

Lucky you!

SuboJvR

Yes it would be subject to inheritance tax laws if the entire estate is above the threshold (bearing in mind spousal allowance will roll to their surviving spouse as well).

You wouldn't need to do anything with HMRC now. When the time comes, as part of the probate forms, this all gets declared then and the estate gets taxed. My memory is a bit hazy - never actually did this bit, and of course filling in probate forms one tends to not remember those times all that well. I assume the tax comes out of the estate money rather than you needing to pay anything.

So for the time being, you don't need to pay anything, and if the estate is worth enough later then you wouldn't suddenly need to pay the tax back out of your own pocket so far as I'm aware....