are gifts from my mum taxable

andrea52

I am self employed and hitting hard times so my dear old mum who has lots of cash stashed "under the bed" wants to give me £1000 a month to help out! I am concerned that this will raise questions. I would like to put this money into my bank account to cover mortgage payments etc.

She is 80 and her estate would not be worth in excess of £300,000

Any advice would be helpful please

dzug

The only potential for tax is inheritance tax should she not live another 7 years. As you say the estate would be less than £300,000, then this does not apply

So no tax.

lisyloo

Hello,

You mum can give you up to £3K per year without there being inheritance tax issues, so it's quite legal.

If she was giving away loads of money then there could be a problem with "deliberate deprivation of assets", so if for example she was trying to give you everything to avoid paying care home fees in the future then that would be illegal.

I don't honestly think you need to worry about this relatively small amount.

Other ways to deal with it are:
1) Get her to pay your bills directly or pay it in cash.
2) Make it a loan and not a gift.

But to be honest if she has her own house then I don't think anyone will be worried about a gift of this size.
The case of "deliberate deprivation" might apply if (for example) she tried to put her house in your name to avoid paying for care and then wanted to claim off the state.

lisyloo

The only potential for tax is inheritance tax should she not live another 7 years.

I don't think that's right.
I think that's for gifts greater than £3K.
There is an exemption of £3K per year.

If you want to google then try "Potentially exempt transfer" for gifts greater than £3K.

andrea52

thanks for the replies they are very helpful.

As the money is cash and at the moment all my bills are paid direct debit I would like to put the money into my bank account but wouldn't that look decidedly dodgy? Would it be better to pay it into mums account then transfer to mine. I even feel quilty just talking about it!

robpw2

you say you own your self employed couldnt she buy 1000 pounds worth of goods .. ? then she would have reciepts etc and wouldnt be a gift and therfore wouldnt be any issures

andrea52

I offer a service rather than a product, but good idea. Thanks

CLAPTON

There is nothing dodgey in your mother giving you money... its absolutely legal and above board. why do you think its dodgey? we have no gift taxes in the UK.

The issues of IH tax doesn't arise if your Mum's estate will be worth less than 300k (well probably 600k now unless your dad left a lot in his estate that didn't go your mother)

Deliberate deprivation of assetts would only apply if your mum went into a home and couldn't pay her own fees.

andrea52

I suppose I feel that if I was seen to be paying £1,000 in cash into my bank account it might be seen that this was money I was earning but not declaring thats why I thought it might be better coming from Mums account.

dzug

lisyloo wrote: »

I don't think that's right.
I think that's for gifts greater than £3K.
There is an exemption of £3K per year.

If you want to google then try "Potentially exempt transfer" for gifts greater than £3K.

True but the gifts are going to be more than £3K a year - £12K (£1K a month) according to the original post, of which £9K is potentially liable to IHT - but never will be because of the size of the estate.

CLAPTON

andrea52 wrote: »

I suppose I feel that if I was seen to be paying £1,000 in cash into my bank account it might be seen that this was money I was earning but not declaring thats why I thought it might be better coming from Mums account.

I'm a bit unclear about the 'cash under the bed' comment... if you meant that literally I have to say its very unwise of your mother keeping large amounts of cash in the house.