Lump Sum from my Dad

Moncs_2

I am in a very lucky position whereby I will be getting a lump sum of around £30k from my father once he sells his house within the next 12 months.

I plan to pay off my current car loan (£11k), my credit card (£3k) and the rest approx (£16k) will be paid towards my mortgage.

My question was if my father was to transfer the money into my bank account and I then pay the debt's from that, is there any tax or legal implications with getting this money from my father in one large lump sum?

Willsnarf1983

dunno but can i suggest keeping a little aside so that if u ever have any problems u have a short term fix coz u never know whats round the corner...most people suggest 2-3 months living expenses

Will

mountainofdebt

I think the main concern would be a potiental Inheritance Tax Liability.

Don't know the specific details but I know a parent is able to 'gift' a sum of money each financial year ( I think its £3k) but any amount over this would be liable to Inheritance Tax IF the person gifting the money was to die within 7 years ....the liability being calculated on a sliding scale.

Don't know if you can avoind it this way but what about getting your dad to pay off the loan & cc directly from his bank account and perhaps gifting you the remainder?

Josie_Jump_3

Don't know whether this is the same but I received an inheritance from my dad which was more than the gift your dad is giving you and I didn't have to pay any tax on this. Perhaps it's worth checking with the Inland Revenue or the CAB ?

Spendalot_2

As Mountain of debt has stated, there is a potential Inheritance tax liability if your father dies within 7 years of the gift. (I am not sure paying the credit cards directly would remove this liability?).

It should be clear that the liability would fall on your fathers estate and not you personally. It would therefore need to be paid out of his estate at the time of death. For Inheritance tax to be payable, his estate would need to be worth in excess of £275,000. (per the current rates). Tax is payable on the value of his estate that exceeds £275,000.

You have no liability to any kind of tax.