Gift from parent

Ngood94323

After some advice. My mother in law wishes to gift my wife around £15,000 does anyone need to pay income tax or any other tax at all? I understand that inheritance tax may apply within 7 yrs if she passes away but her total estate value including this gift would be below the £325,000 inheritance tax limit.

thanks in advance

marcia_

 You don't pay tax on gifts 

Ngood94323

but is t there a limit to the amount you can give away as a gift per tax year? £3000/year or £6000 in one tax year if nothing given in the previous tax year but this can only be done once

oldernonethewiser

If she gifts £15k and lives for a further 7 years then no tax will be payable.

Savvy_Sue

Is she leaving herself with plenty of money to deal with the unexpected - roof blows off, car dies, boiler and all white goods die at the same time? And is there any likelihood of her needing personal care - poor health, progressive disease or disability? 

If yes and no, there's no issue at all. 

silvercar

Ngood94323 said:

but is t there a limit to the amount you can give away as a gift per tax year? £3000/year or £6000 in one tax year if nothing given in the previous tax year but this can only be done once

No limit on what someone can give away. The £3000/ year is a tax exemption from IHT should the donor die within 7 years, it doesn’t stop the money being given away.

WilliamCostiganJnr

Very interested in this thread. My elderly father wants to gift myself and brother some money. Inheritance tax wouldn't be an issue but the worry is him needing care in the future. In fact that's the reason he wants to gift us something now, so it doesn't line the pockets of a care home owner down the line.

marcia_

WilliamCostiganJnr said:

Very interested in this thread. My elderly father wants to gift myself and brother some money. Inheritance tax wouldn't be an issue but the worry is him needing care in the future. In fact that's the reason he wants to gift us something now, so it doesn't line the pockets of a care home owner down the line.

 Which means he will be reliant on the cheapest possible service organised by social services. 

 Do you really want him to not have the best care so you can have your gift? 

Brie

WilliamCostiganJnr said:

Very interested in this thread. My elderly father wants to gift myself and brother some money. Inheritance tax wouldn't be an issue but the worry is him needing care in the future. In fact that's the reason he wants to gift us something now, so it doesn't line the pockets of a care home owner down the line.

If he's dependent on the local authority to pay for his care they will be asking if he's given away any large sums and will want that reclaimed to cover costs.  Potentially if he owns his home the LA will put a lien on it so that when it's sold they get their money that way - but only if they see the gift as deprivation of assets.

WilliamCostiganJnr

marcia_ said:

WilliamCostiganJnr said:

Very interested in this thread. My elderly father wants to gift myself and brother some money. Inheritance tax wouldn't be an issue but the worry is him needing care in the future. In fact that's the reason he wants to gift us something now, so it doesn't line the pockets of a care home owner down the line.

 Which means he will be reliant on the cheapest possible service organised by social services. 

 Do you really want him to not have the best care so you can have your gift? 

Honestly it's something we've discussed recently and yes that's how he feels, as do I and my brother. We (that's all of us) don't like the idea of him working hard all his life for everything he's worked for to go to care home boss and let's be honest that's where it goes as the staff don't see a great deal.

marcia_

WilliamCostiganJnr said:

marcia_ said:

WilliamCostiganJnr said:

Very interested in this thread. My elderly father wants to gift myself and brother some money. Inheritance tax wouldn't be an issue but the worry is him needing care in the future. In fact that's the reason he wants to gift us something now, so it doesn't line the pockets of a care home owner down the line.

 Which means he will be reliant on the cheapest possible service organised by social services. 

 Do you really want him to not have the best care so you can have your gift? 

Honestly it's something we've discussed recently and yes that's how he feels, as do I and my brother. We (that's all of us) don't like the idea of him working hard all his life for everything he's worked for to go to care home boss and let's be honest that's where it goes as the staff don't see a great deal.

 No the staff don't get paid there worth but the standard of care is very different between LA sourced and private care. Even down to food, entertainment, availability of a RN, therapies etc 

 But you should be more concerned about depravation of assets and council claims to his home