Cash gift and Income tax

Soulivan

Are there any implications with regards to a large sum of money given as a gift and income tax? Do I need to declare this and how do HMRC know that is it is a gift as opposed to earned income that is taxable?

Parents are gifting me between 15 - 25k to help with my mortgage deposit and are planning to bank transfer me the money. Is there anything I should be aware of in terms of tax implications? I'm aware of inheritance tax but should I worry about income tax?

Thanks, any help would be appreciated

xylophone

Your parents should keep a record of the gift for IHT purposes (and the mortgagee will require confirmation that the money is an absolute gift) but there is no tax for you to pay on the gift or any need to declare it to HMRC.

You might wish to advise your bank that you are expecting to receive a large sum from your parents as a gifted deposit for your property.

Alternatively, your parents could transfer the money to the solicitor dealing with your purchase.

Soulivan

I should have mentioned that Nationwide have come back with a mortgage offer. My mortgage advisor asked them to sign a gift form and that had come off with the app so they've accepted that.

Thanks for the info. That gives me some piece of mind.. I've been paranoid about the hrmc classing the amount given as taxable income.

badmemory

Definitely not taxable income, however, the suggestion that you notify your bank of the expected sum is a good one. Some banks are notoriously twitchy about large sums (due to a large extent to their money laundering past) so Nationwide should be ok.

Soulivan

Good advice, I'll make them aware so they don't block any incoming funds.