Can my dad send me £17K from abroad?

foreverindebted

Evening,

My ex and I split two years ago and agreed our debt plan between us - he was meant to keep paying the credit cards, which were mostly all his debt, but in my name. He did so for a year, but his circumstances have changed and he has had missed payments in the last few months, and I am consistently being chased for payment from one or another of the three he is meant to be paying. Things have come to a head recently with two banks chasing me, and him simply saying he doesn't have the money.

I am self-employed part time, can't take a loan to cover his numerous cards (in my name) and seem to have no option but to go for an IVA myself, even though *my* finances are strictly managed precisely because I have a low income and don't want to run into problems that affect my children.

After months of this stress, my dad has decided to take out a loan against his house and give me the money so that I can pay off the cards, and then my ex will pay him back monthly (and if he doesn't, my dad is in a secure enough position to not be crippled by it, or lose his house or anything like that), but now I'm wondering if I'm going to have tax issues by my dad sending £17K to pay off the cards? And will it affect what the top up housing benefit I receive? Will they see it as income I have to pay tax on?

So it's a customs question and an income question.

We will be paying it back, but at £250 a month - which I'd much rather do as a loan from the bank, but no one will give me a loan!

I'd be very grateful if anyone has advice on this!

Linton

There is no tax on gifts. I have no idea what the effect on housing benefit could be.

Just for completeness - were he to die in the next 7 years and he is liable to UK inheritance tax then the gift would be added to his estate for calculating inheritance tax.

Red-Squirrel_2

To keep it simple regarding benefits, can your dad not make a direct payment straight to the card accounts rather than having the money go into an account in your name?

Might be worth asking on the 'credit cards' section of the forum, there are knowledgeable types there!

foreverindebted

Thanks both, that's already very useful.

My dad is Australian/South African, so don't think inheritance tax will be an issue and Red-Squirrel, I did think of that, but wasn't sure it was 'allowed'. I'll ask in the other section on the forum. Thanks

tyllwyd

You haven't said what country your dad lives in? There may be tax implications for him depending on the tax rules there, but he's probably best off asking for advice from someone local to him.

Keep_pedalling

No tax, and no impact on any benefits you receive, as that is based on the amount you have saved, and as this gift will go immediately on paying off debt you still won't have any savings.

In future though don't let anyone else run up debt in your name.

TBagpuss

It may be simpler for your dad to pay the debts directly - but it may cost him a bit more in bank charges if he is making a number of transfers rather than just one.

I don't think it will affect your benefits as it is a loan, not a gift, but you may want to have something in writing from your dad setting you the amount of the loan and the repayment terms so you have proof of this. (it also gives him a bit of protection!)

pogofish

Never mind any money - Maybe you could explain how you manage to be your father's mother?

That feat alone is probably worth a great deal to some sectors of the media.

tyllwyd

pogofish wrote: »

Never mind any money - Maybe you could explain how you manage to be your father's mother?

That feat alone is probably worth a great deal to some sectors of the media.

I'm confused - what does this relate to?

pogofish

tyllwyd wrote: »

I'm confused - what does this relate to?

It's being posted in the Mothers forum!