A definitive answer to family giving you money

Levatorani123

I get mixed answers online so wondered if someone could answer this question.

My mother has been helping me financially to cover debt payments due to  my disability.

These are gifts just voluntarily  given and are in no way as payment for anything.

Do these have to be counted for tax purposes? 

Some places say family given money  cannot ever be taxed and others say you get 3k and then it is counted towards tax.

Thanks.

Mark_d

If the gifts are in excess of £3k in any year then you should keep a record.  Inheritance tax is potentially payable if your mum dies within 7 years of giving the gift.

silvercar

It. Will never be counted towards your personal tax bill as there is no tax to the recipient of gifts. There is no tax on making gifts unless the donor doesn’t survive 7 years from the date of the gift. Then there is the possibility that the gift could be included in the estate of the donor. Regular gifts given from excess income are excluded from the estate.

Levatorani123

silvercar said:

It. Will never be counted towards your personal tax bill as there is no tax to the recipient of gifts. There is no tax on making gifts unless the donor doesn’t survive 7 years from the date of the gift. Then there is the possibility that the gift could be included in the estate of the donor. Regular gifts given from excess income are excluded from the estate.

 Thanks.

Although Already I have the two answers that were confusing me.

 The guy above says  anything over 3k is taxable, or did he mean you should just keep a record anyway, not that it is taxable?

Levatorani123

Mark_d said:

If the gifts are in excess of £3k in any year then you should keep a record.  Inheritance tax is potentially payable if your mum dies within 7 years of giving the gift.

Are you saying tyou should just keep a record or that over 3k IS  taxable?

Albermarle

Levatorani123 said:

silvercar said:

It. Will never be counted towards your personal tax bill as there is no tax to the recipient of gifts. There is no tax on making gifts unless the donor doesn’t survive 7 years from the date of the gift. Then there is the possibility that the gift could be included in the estate of the donor. Regular gifts given from excess income are excluded from the estate.

 Thanks.

Although Already I have the two answers that were confusing me.

 The guy above says  anything over 3k is taxable, or did he mean you should just keep a record anyway, not that it is taxable?

Any money given to you as a gift incurs no extra tax liability for the giver or the receiver.

If the giver has enough assets that their estate will be liable for inheritance tax when they die, then any gifts they have made within 7 years of their death will be counted when their estate is valued for inheritance tax .
This is to stop rich people gifting large sums of money away to avoid inheritance tax if they know they may die soon. 

However this is not extra tax, as if they had not made any gifts, they would be in the same position.

As a concession, if the giver only gives away max £3kpa this is not counted in their estate if they die within 7 years.

p00hsticks

Levatorani123 said:

Mark_d said:

If the gifts are in excess of £3k in any year then you should keep a record.  Inheritance tax is potentially payable if your mum dies within 7 years of giving the gift.

Are you saying tyou should just keep a record or that over 3k IS  taxable?

It's not you as the recipient who really needs to be keeping a record, it;s the person who is making the gift. When they die, whoever is dealing with their estate would need to look back over the last seven years to see what gifts have been made as if over £3k in any year they could potentially still form part of their estate for inheritance tax purposes. 

Nomunnofun1

Levatorani123 said:

I get mixed answers online so wondered if someone could answer this question.

My mother has been helping me financially to cover debt payments due to  my disability.

These are gifts just voluntarily  given and are in no way as payment for anything.

Do these have to be counted for tax purposes? 

Some places say family given money  cannot ever be taxed and others say you get 3k and then it is counted towards tax.

Thanks.

Firstly - is your mother’s estate likely to exceed £325k?  If the answer is ‘No’ there is nothing to be concerned about from a tax point of view. Your mother can give away whatever she likes - no declaration required, no tax payable by anybody. The 3k exemption is irrelevant. 

If the answer is ‘Yes’ - does she own a property? That £325k becomes £500k. 

If the estate is in excess of £500k including property, come back to us.

Levatorani123

Nomunnofun1 said:

Levatorani123 said:

I get mixed answers online so wondered if someone could answer this question.

My mother has been helping me financially to cover debt payments due to  my disability.

These are gifts just voluntarily  given and are in no way as payment for anything.

Do these have to be counted for tax purposes? 

Some places say family given money  cannot ever be taxed and others say you get 3k and then it is counted towards tax.

Thanks.

Firstly - is your mother’s estate likely to exceed £325k?  If the answer is ‘No’ there is nothing to be concerned about from a tax point of view. Your mother can give away whatever she likes - no declaration required, no tax payable by anybody. The 3k exemption is irrelevant. 

If the answer is ‘Yes’ - does she own a property? That £325k becomes £500k. 

If the estate is in excess of £500k including property, come back to us.

My mothers estate is  probably unlikely to exceed £3k, she helps  out with  pretty much most of her money in and has no assets

Ok that clears it up, thank you guys!

Nomunnofun1

Levatorani123 said:

Nomunnofun1 said:

Levatorani123 said:

I get mixed answers online so wondered if someone could answer this question.

My mother has been helping me financially to cover debt payments due to  my disability.

These are gifts just voluntarily  given and are in no way as payment for anything.

Do these have to be counted for tax purposes? 

Some places say family given money  cannot ever be taxed and others say you get 3k and then it is counted towards tax.

Thanks.

Firstly - is your mother’s estate likely to exceed £325k?  If the answer is ‘No’ there is nothing to be concerned about from a tax point of view. Your mother can give away whatever she likes - no declaration required, no tax payable by anybody. The 3k exemption is irrelevant. 

If the answer is ‘Yes’ - does she own a property? That £325k becomes £500k. 

If the estate is in excess of £500k including property, come back to us.

My mothers estate is  probably unlikely to exceed £3k, she helps  out with  pretty much most of her money in and has no assets

Ok that clears it up, thank you guys!

Is ‘unlikely to exceed £3k’ correct?