Carers tax

NatashaFletch

Hi, my elderly mum has come to live with me. I am currently taking a month unpaid leave from my job. If I take £1500 a month from my mums savings , would I have to pay tax on it? 

[Deleted User]

No. When you say ‘ £1500 a month’, do you mean a one- off payment? 

NatashaFletch

No. A regular payment. If I give up my job then I still have my mortgage and bills to pay. She came out of hospital and went into a care home for an assessment period. She requires 24 hour care but they charge £1250 a week and I don't want her in a home.

Jeremy535897

You will be looking after your mother, and if she pays you £1,500 a month, that does not create income in your hands. You talk about "taking" money. Presumably you have a lasting power of attorney?

If your mother dies within seven years of giving you money beyond that which represents a fair share of the costs of looking after her, this may reduce the amount of inheritance tax exemption on her death, but it is unlikely to matter.

[Deleted User]

On a related issue you could, of course, claim actual carers allowance.

https://www.gov.uk/carers-allowance/eligibility

Keep_pedalling

Does your mother have full mental capacity?

NatashaFletch

Sorry, forgot to mention that I do have POA!
I'm looking into applying for carers allowance. Thanks

NatashaFletch

Keep_pedalling said:

Does your mother have full mental capacity?

No she doesn't. Fortunately she arranged the POA a few years ago so I invoked it in January this year. 

ljayljay

I have also wondered about this in relation to accepting money when doing care duties for my mum but wondered if it may be taxable.
About 5 years ago I reduced my hours & then eventually took early retirement in order to spend between 20/25 hours per week caring for my mother. Involves shopping, cooking, cleaning, taking to appointments etc.
As I gave up paid employment my mother & siblings think I should receive an allowance from her. However, as I have also organised her a paid carer, who no doubt is on an agency payroll with the usual Tax/NI responsibilities, I am unsure if I would be treated the same. Obviously there seems little point in accepting payments from my mum only to see in affect part of her pensions being reduced by me having a tax liability.
Am I misunderstanding tax liabilities in such cases?
Also to be clear she is well below the IHT threshold as far as gifts go & unlike the OP does not live with me . 

[Deleted User]

ljayljay said:

I have also wondered about this in relation to accepting money when doing care duties for my mum but wondered if it may be taxable.
About 5 years ago I reduced my hours & then eventually took early retirement in order to spend between 20/25 hours per week caring for my mother. Involves shopping, cooking, cleaning, taking to appointments etc.
As I gave up paid employment my mother & siblings think I should receive an allowance from her. However, as I have also organised her a paid carer, who no doubt is on an agency payroll with the usual Tax/NI responsibilities, I am unsure if I would be treated the same. Obviously there seems little point in accepting payments from my mum only to see in affect part of her pensions being reduced by me having a tax liability.
Am I misunderstanding tax liabilities in such cases?
Also to be clear she is well below the IHT threshold as far as gifts go & unlike the OP does not live with me . 

See start of fourth post in this thread. It is not classed as income in your hands. As your mum is below the IHT threshold she can give you as much money as she likes without implications. You also should consider claiming Carers allowance which is taxable.

ljayljay

Thanks, yes I am aware of Carers Allowance & do receive the NI credit that can be awarded for 20 hours care but don't do enough hours for the allowance.
I have never heard of this 'income in your hands' term before reading this thread. Can you provide a link to explain when/how this applies in relation to taxation matters?