Gifting someone money help

johnnord1

Hi
I am going to give my sister 120,000 as a gift, and want to know if we will have to pay tax on it, i understand about her having to pay inheritance tax if anything happens to me within 7 years. but is there anything i need to know about, my sisters has her own bushiness and has to do her tax returns etc will this effect anything? we she have to declare this when she does her tax returns, sorry not that clued up with money etc. thanks
John

00ec25

no tax on gifts

this really must be made into a sticky given how often the same question is asked

Keep_pedalling

johnnord1 wrote: »

Hi
I am going to give my sister 120,000 as a gift, and want to know if we will have to pay tax on it, i understand about her having to pay inheritance tax if anything happens to me within 7 years. but is there anything i need to know about, my sisters has her own bushiness and has to do her tax returns etc will this effect anything? we she have to declare this when she does her tax returns, sorry not that clued up with money etc. thanks
John

No your sister will not pay IHT, that would come out the remainde4 of your estate.

If your estate is actually in IHT territory and you are in good health, then you can cover any IHT that would be due on this gift with low cost term insurance, which is what we have done with gifts to our children.

agrinnall

00ec25 wrote: »

this really must be made into a sticky given how often the same question is asked

It's been said before on more than one occasion, but I suspect even if it was done it wouldn't cut the number of times the question is asked by much as people who don't bother to search for the answer before posting probably also wouldn't bother to look to see if there's a sticky.

uknick

What puzzles me is how many of those that post the "gift tax" question are new to MSE. If they've found the MSE site by a Google search on IHT, how much harder is it to get the answer from a Google search?

Tom99

No tax now but £120,000 will be deducted from your own Inheritance Tax Nil Rate Band for the next 7 yrs.
Your £3,000pa IHT allowance for last year and this year could be deducted from the £120,000 if you have not made any other gifts.

kidmugsy

If I were you I'd document the gift by an exchange of letters with your sister. Then if ever the money-laundering police demanded to know where your sister's money had come from she could show them copies of the letters.

[Deleted User]

00ec25 wrote: »

no tax on gifts

this really must be made into a sticky given how often the same question is asked

Equally - no mention is ever made of the potential value of the estate. I have lost count of the times where a poster has enquired as to 'gift tax' and the estate value comes nowhere near the threshold. Accordingly, the £3000 limit, seven year rule etc etc etc etc become irrelevant.

badmemory

uknick wrote: »

What puzzles me is how many of those that post the "gift tax" question are new to MSE. If they've found the MSE site by a Google search on IHT, how much harder is it to get the answer from a Google search?

It could also be a lack of trust of some sites on the internet. After all if you can find more accurate (& practical) information on here than on a gov site, which one would you ask? Anyone having read more than a few threads on here soon realises who gives the spot on info & on which board.