Giving relative money gift

jake1870

Hi my mother helped me get a house 20years ago and told me if I ever sold it I had to give my sister some of the money, my plan is to give her 100000 I keep the same and give 5000 to a charity like I was told to do. Can some one tell me the best way to do this, as I am not that good with money etc, can I just transfer my sister the money or do I have to pay tax on to? Thanks

Keep_pedalling

Assuming this house was your main home, then there is no tax on gifts for either the giver or recipient. If your main residence is somewhere else, then you may have a capital gains liability that needs to be factored in before you decide how much to give away.

AnotherJoe

Is this the house you live in?

elsien

Is your sister working and do you need to consider the impact on any benefits she may be claiming?
How much money did mum give you and do you want to give your sister that amount or do you just feel you should? If there's not an accidental extra zero in there, that's a lot to give away.

jake1870

I have been renting the house out and am now selling it, I have another property that I live in.
My sister has a good job and her own house.
So I am giving her around 100,000 off the sale of the house, As a gift. What's the best way to do it?
Thanks for the replys

McKneff

There is no tax on gifts, just give her a cheque or bank transfer it .
Simple as that

AnotherJoe

McKneff wrote: »

There is no tax on gifts, just give her a cheque or bank transfer it .
Simple as that

But there IS a tax on capital gains.



OP, how much did the house cost and how much are you selling it for? There will likely be a large amount of tax on that. Work out what that is before paying your sister, or giving money to charity.

jake1870

So I can just transfer her the money and she doesn't pay tax or nothing on it?

Keep_pedalling

jake1870 wrote: »

So I can just transfer her the money and she doesn't pay tax or nothing on it?

Correct, but you should work out how much, if any, CGT you will need to pay before you decide how much is fair to give her. If you have never lived in the property there are no allowances over your personal annual allowance you can claim so every penny of gain over £11,700 will be subject to capital gains tax.

xylophone

Check on your CGT position.

https://www.gov.uk/capital-gains-tax


You should keep a note with the amount and date of the gift with your will as there may be IHT implications.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm04057

Mojisola

jake1870 wrote: »

So I can just transfer her the money and she doesn't pay tax or nothing on it?

She won't have to pay any tax but, if she is claiming any means tested benefits, that amount would affect her claim.