Parents want to give me some money to pay mortgage off

oggy1975

Hi
Mum and dad want to give me 10k which will more or less pay my mortgage off . Will I be taxed on this if I pay the cheque into mine and hubbys account
Thanks
Oggy

bexster1975

Hello

Can't think why you would. It's a gift isn't it?

I hope it offers you the freedom that comes with being mortgage free!

Bexster

Mojisola

oggy1975 wrote: »

Mum and dad want to give me 10k which will more or less pay my mortgage off .

Will I be taxed on this if I pay the cheque into mine and hubbys account

There is no gift tax in the UK - either for the giver or the receiver.

Do you claim any means tested benefits?

Even if your parents' estate is big enough to pay inheritance tax, they are allowed to give away £3000 each in a year and backdate to the previous year so they could give up to £12,000 without it affecting IHT.

oggy1975

No we both work full time

Mojisola

oggy1975 wrote: »

No we both work full time

Then there isn't anything to consider.

Enjoy being mortgage free!

Keep_pedalling

Mojisola wrote: »

There is no gift tax in the UK - either for the giver or the receiver.

Do you claim any means tested benefits?

Even if your parents' estate is big enough to pay inheritance tax, they are allowed to give away £3000 each in a year and backdate to the previous year so they could give up to £12,000 without it affecting IHT.

To clarify, they can give as much away as they like, but only the the £3k allowance will immediately fall out their estate, the rest relies on staying alive for 7 years.

It is wise to keep a record of all such gifts to make life simple for your executor.

Mojisola

Keep_pedalling wrote: »

To clarify, they can give as much away as they like, but only the the £3k allowance will immediately fall out their estate, the rest relies on staying alive for 7 years.

It is wise to keep a record of all such gifts to make life simple for your executor.

As there are two parents and they didn't give anything last year, won't the £10,000 be more than covered by the exemption?

AnotherJoe

BTW, you'd almost certainly be better off if you paid this into your pensions, rather than pay the mortgage off. The monthly payments for that must be trivial.

Keep_pedalling

Mojisola wrote: »

As there are two parents and they didn't give anything last year, won't the £10,000 be more than covered by the exemption?

Yes, and if they are in IHT territory they should consider rounding up to the full £12k and continue gifting in future years. If they are cash rich then bigger gifts should be considered to take advantage of the 7 year rule.

Keep_pedalling

AnotherJoe wrote: »

BTW, you'd almost certainly be better off if you paid this into your pensions, rather than pay the mortgage off. The monthly payments for that must be trivial.

Or if you have little in the way of savings hold as an emergency fund.