gifting money to a friend

longwalks1

I know there are limits on gifting money to avoid IHT etc, but are there limits/rules/laws on gifting sums of money between family or friends, non IHT avoiding-related?

How would one go about gifting a sum (say between, £10,000 or £20,000) to a friend?

Granted there will be many 'what if the friendship fails' or 'what if the lender wants the money back in years to come', but are there any legal ways to transfer between 2 adults?

Hypothetically of course

Ayr_Rage

What do you mean by legal ways?

You can give any gift you wish.

You just send them the money, it's as simple as that.

Letting your executors know would help them sort out your estate when when you've gone.

longwalks1

Thank you Ayr-Rage. What i meant was would a transfer of £10k or £20k flag up anywhere? Would the bank (aside from giving them a heads up or speaking to them by phone) or HMRC want to know about it? (outside of a passing or IHT/probate).

Sorry, probably worded slightly wrong

Ayr_Rage

HMRC have no interest in gifts.

Your bank may query a large payment to a new payee, giving a heads up is pointless, deal with it if an issue arises.

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/6664952/gifting-money-to-a-friend

You say "gifting a sum" and then "what if the lender..."

Is this a gift or a loan? If it is a gift, there is no lender.

If the individual with the funds expects the money back in some way / period, it is usually best not to lend in the first place.

longwalks1

https://forums.moneysavingexpert.com/discussion/comment/81970326#Comment_81970326

Sorry, wrong wording. The 'gifter' or the 'payer'. Please ignore the word 'lender'

grumpy_codger

https://forums.moneysavingexpert.com/discussion/comment/81970325#Comment_81970325

HMRC have no interest in gifts.

Only after 7 years?

Ayr_Rage

https://forums.moneysavingexpert.com/discussion/comment/81970488#Comment_81970488

Not at the time of the gift, the donor or recipient do not have to report anything to HMRC.

It obviously may be taken into account if the donor dies, depending on when the gift was given.

The OP mentioned outside of a passing at 1102.

Ergates

https://forums.moneysavingexpert.com/discussion/comment/81970315#Comment_81970315

Outside of IHT (within 7 years) there is no tax implication to either the donor or recipient. Gifts may be given freely and are not counted as income.

Another scenario that might come up, depending on the age/situation of the donor is "deprivation of assets". Giving away money/assets before going into a care home to avoid paying fees.

longwalks1

Thank you all. I'd seen a few videos about HMRC Ai Connect system and wasnt sure if it would pick up things such as money transfers (one off gifts, not large sums on a regular basis)

Brie

It's no different than paying a business a large sum to do some work for you. The bank will ask their "is this fraud?" questions. Your friend (as they are not a business) may have questions asked by their bank as to why their getting a large sum from someone out of the blue.