Non tax payer question...

moonegg_2

Hi,

Sorry if this seems a really obvious question but I am at a dead end in trying to work this out. I also hope I have posted in the right section.

I am currently a non tax payer (I'm a full time mother) and a relative would like to give me £10,000 as a good will gesture.

My question is would either of us have to pay tax on this transfer? I am aware that I can fill in a R85 form to avoid paying tax on the interest but I am confused about the lump sum itself.

TIA

CLAPTON

There is no gift tax in the UK so anyone can give any sum of money to anyone without any immediate tax implications for either party.

However, if the person giving the money should die within 7 years then there may be a potential inheritance tax liability if their total estate including gifts in the last 7 years are more than the IHT limit at the time (at the moment its 300,000).
The liability would be with the deceases estate so in normal circumstances wouldn't affect you directly.