Dad might be buying me a house

badger555

hi all,I will shortly be in the position where my dad is going to be giving me a substantial amount of money,not sure exactly but it will be 50-100k to be used as a deposit for  or to buy a flat/house outright.The reason this has come around is because my mum sadly died 2 years ago,she left everything she owned to my dad.

Now,I understand things aren't quite as simple as a parent giving their children a large amount of money, I believe there is a 3k per year limit on gifts of money or 5k if its towards a wedding. Does anyone know how we stand with this?

Slithery

There is no limit on gifts. However, deprivation of assets may be an issue.

RobM99

Slithery said:

There is no limit on gifts. However, deprivation of assets may be an issue.

Well, nothing like a detailed explanation, is there?

greatcrested

You are thinking of Inheritance Tax.

Dad can give you as much as he wants, but if it is more than those limits (£3K etc) AND he dies within 7 years, then the gift is included in his estate for the purposes of calculating IHT.

(this is to prevent people giving away their money/property etc when they get seriously ill just before they die, to avoid IHT!)

As Slithery says, DofA may also be an issue if dad needs council care in the future.

davidmcn

greatcrested said:

You are thinking of Inheritance Tax.

Dad can give you as much as he wants, but if it is more than those limits (£3K etc) AND he dies within 7 years, then the gift is included in his estate for the purposes of calculating IHT.

(this is to prevent people giving away their money/property etc when they get seriously ill just before they die, to avoid IHT!)

And although people sometimes get very concerned about gifts, they tend to forget that if the money wasn't gifted, it definitely will be treated as part of the estate for IHT purposes.

csgohan4

RobM99 said:

Slithery said:

There is no limit on gifts. However, deprivation of assets may be an issue.

Well, nothing like a detailed explanation, is there?

By all means chip in, here's a quick google:

https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/deprivation-of-assets/

JGB1955

If your mother passed away less than 2 years ago your father could use a deed of variation to pass the money to you. It wouldn't change the possibility of deprivation of assets being potentially claimed, but might make his intentions clearer.

youth_leader

Does your Dad inherit your Mum's IHT allowance, ie his estate can be £650K now?  I haven't looked into it since my husband died in 2016.

AnotherJoe

badger555 said:

hi all,I will shortly be in the position where my dad is going to be giving me a substantial amount of money,not sure exactly but it will be 50-100k to be used as a deposit for  or to buy a flat/house outright.The reason this has come around is because my mum sadly died 2 years ago,she left everything she owned to my dad.

Now,I understand things aren't quite as simple as a parent giving their children a large amount of money, I believe there is a 3k per year limit on gifts of money or 5k if its towards a wedding. Does anyone know how we stand with this?

Nah, they pretty much are that simple.

Complications only really arise if he's likely to go into a care home.

[Deleted User]

You can be gifted as much as he wishes as others have said. 
If your father were to pass away within 7 years of the gift there could be inheritance tax on the gift (depending on the size of the overall estate). However, it is a sliding scale so it becomes less and less as the years progress away from the gift.

getmore4less

Deleted_User said:

You can be gifted as much as he wishes as others have said. 
If your father were to pass away within 7 years of the gift there could be inheritance tax on the gift (depending on the size of the overall estate). However, it is a sliding scale so it becomes less and less as the years progress away from the gift.

Only if the gift would be taxable and £100k fall within a single nil rate band so there is no tax to get taper relief.

In most cases gifts in excess of any allowances are IHT neutral on the donors estate for 7 years when they drop out, 
In some circumstances you need to go back 14 years.