Cash Gift from parents - Do I need to pay income tax on this gift ?

jennifernil

He can gift £3000 in a tax year without implications for IHT, so £3k now and £3k after 6th April would take care of only £6k. Does he have a wife? If so, she could do likewise, so that would take £12k out of possible IHT. Is his estate likely to be subject to IHT?

No need to say anything to HMRC, once the money is yours you can do what you like with it. It would ,however, be a good idea for him to make a note of the gift for future reference.

leo1975_2

Thanks jennifernil, much appreciated

He is divorced from his wife now so she is selling the house (which is in his name) and using the proceeds to buy and move into a new property. He has no other "estate" as such - he lives in a rented house.

Just to check then, if he gave us the full £15k in this tax year, would there be IHT implications?

Thanks

CLAPTON

leo1975 wrote: »

Thanks jennifernil, much appreciated

He is divorced from his wife now so she is selling the house (which is in his name) and using the proceeds to buy and move into a new property. He has no other "estate" as such - he lives in a rented house.

Just to check then, if he gave us the full £15k in this tax year, would there be IHT implications?

Thanks

IHT applies to estate of over 325,000 (including gifts made in the last 7 years except for certain allowaed gifts e.g 3k per annum)
if his estate is likely to be more than 325,000 the IHT may apply, if his estate is less than there will be no IHT

John_Pierpoint

Hi Leo,

Don't take this personally it is just my nasty suspicious mind trying to think of all the angles. Fortunately my only brushes with divorce have been when trying to buy houses. Sometimes one is not given the real reason for sale.
"We are getting divorced" is about as likely as "We are trying to avoid going bust".

leo1975 wrote: »

Thanks jennifernil, much appreciated

He is divorced from his wife now so she is selling the house (which is in his name) and using the proceeds to buy and move into a new property. He has no other "estate" as such - he lives in a rented house.

Just to check then, if he gave us the full £15k in this tax year, would there be IHT implications?

Thanks

All legally buttoned up ?

Just as with "deprivation of assets" in the case of families trying to avoid care home fees - there can be similar wrangles in divorce cases.
(The state is a bit short of free cash at the moment, in fact it is up to its neck in hock and trying to devalue its debts. So it (we) would rather people were responsible for their own dependants).

leo1975_2

Hi John

I can understand your suspicious mind. Probably should have explained in more detail - they divorced about 15 years ago and part of the agreement was she could keep the house (he paid remainder of mortgage which is now paid off) as long as she didnt ask for any of his savings, pension, etc

sunnyvij

What if a rich uncle, who lives abroad, wants to help me to buy a house and gifts me 100k. Does anyone know the tax implications for me as a recipient?

le_loup

NONE!
Why don't people do a search ... this has been answered so many times.

John_Pierpoint

We are soon coming up to the last day of the tax year - So it is £6,000 now and 3,000 on 6th of April; if you want to be absolutely sure of not getting involved in IHT implications. The remaining £6,000 of the £15K deposit could be a loan at a peppercorn rate of interest. Are there any other siblings with "Great Expectations" when their dad (or mum) passes on?

Annual exemption

You can give away gifts worth up to £3,000 in total in each tax year and these gifts will be exempt from Inheritance Tax when you die. You can carry forward any unused part of the £3,000 exemption to the following year, but if you don't use it in that year, the carried-over exemption expires.
.
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You can make small gifts up to the value of £250 to as many individuals as you like in any one tax year. However, you can't give more than £250 and claim that the first £250 is a small gift.

http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

smartsaver

Am I undersatnding this correctly - you can give family money without inheritance tax implications providing your total estate is under the inheritance tax threshold? TIA

Randvegeta

smartsaver wrote: »

Am I undersatnding this correctly - you can give family money without inheritance tax implications providing your total estate is under the inheritance tax threshold? TIA

Yes. OR, if they live longer than 7 years after the gift was made.