ioneabee Posted August 24, 2012 Share Posted August 24, 2012 As this forum is the font of all knowledge My parents (in their late 70's) wnat to give me a monetary gift - but obviously don't want the tax man to get his mucky fingers on it. Any suggestions on how they should go about it - I'm obviously full tax paying etc Quote Link to comment Share on other sites More sharing options...
mbs Posted August 24, 2012 Share Posted August 24, 2012 A basic answer is that they can give you £3,000 in any year and not effect their inheritance tax, anymore and they should understand that the 7 year rule comes into play whereby some or all of the gift may be taken into account for inheritance tax purposes is the giver dies within 7 years. The gift is tax free to you. See http://www.direct.gov.uk/en/MoneyTaxAnd ... /DG_179336 Quote Link to comment Share on other sites More sharing options...
Sarnie Posted August 24, 2012 Share Posted August 24, 2012 Each parent will have their own IHT threshold, which as long as they don't exceed you shouldn't have to pay any IHT, depending on the figures were talking about here. However, if they die within 7 years of giving you the money, it could complicate matters. You need to seek out a specialist IFA. Quote Link to comment Share on other sites More sharing options...
mbs Posted August 24, 2012 Share Posted August 24, 2012 +1 for Sarnie's advice to use a FA is we're taking large sums. Quote Link to comment Share on other sites More sharing options...
Chesterfield Posted August 24, 2012 Share Posted August 24, 2012 Im not an accountant, but I also dont like the tax man - you may want to have an accountant look over the below, but I think its about right.. There are a few options depending on the sum involved. Any individual can gift £3000 per year. This is the limit on the person giving the gift, not the person receiving. i.e. a parent could gift £1500 to one person and £1500 to another, or £3000 to one individual. This limit is per person doing the giving, so your mother could give you up to £3000 and your father could give you £3000 making a total of £6000. However this will use up their allowance for the year, so "giving" any other sums which may flag up to the tax man will render such gift liable for inheritance tax. They can also use a previous years allowance if they have not already done so. So if they have not used last years allowance you could have: mum £3000 for tax year 11/12 mum £3000 for tax year 12/13 dad £3000 for tax year 11/12 dad £3000 for tax year 12/13 Obviously in April 13 we have a new tax year, so you could have another £6000 at that point in time too. Do it in one big chunk (over £10k) and you may be asked where this cash has come from and the banks must report this back to the Inland Revenue - though this flag limit may now be £20k, I forget. You probably wont hear anything as much bigger cash transactions are carried out by individuals each day, but if you do get asked by the inland revenue for figures, you best make sure you have done it by the book otherwise they will be on your back for life. If its for a wedding, then there is a one off limit of £5000 from parents. Any larger than the £18k that could be spread over the 3 tax years as above then you need to plan alternatives. Have a read here for the rules, and pick your way through them http://www.hmrc.gov.uk/inheritancetax/p ... -gifts.htm Quote Link to comment Share on other sites More sharing options...
theheff Posted August 24, 2012 Share Posted August 24, 2012 I'm by no way a expert but how about "selling" them something? Can't you just say it was payment for something? Quote Link to comment Share on other sites More sharing options...
Stew Posted August 24, 2012 Share Posted August 24, 2012 I'm by no way a expert but how about "selling" them something? Can't you just say it was payment for something? I'm pretty sure that would be tax fraud. Quote Link to comment Share on other sites More sharing options...
mbs Posted August 24, 2012 Share Posted August 24, 2012 I'm by no way a expert but how about "selling" them something? Can't you just say it was payment for something? No, do it by the rules, if the tax man ever gets his claws into you he's watching you for the rest of your life. Quote Link to comment Share on other sites More sharing options...
theheff Posted August 24, 2012 Share Posted August 24, 2012 How would they find out though. Would the be some kind of audit if they was to die then? Quote Link to comment Share on other sites More sharing options...
mbs Posted August 24, 2012 Share Posted August 24, 2012 How would they find out though. Would the be some kind of audit if they was to die then? Read Chesterfields post re the banks duty to report unusual transactions to the revenue Quote Link to comment Share on other sites More sharing options...
Ekona Posted August 24, 2012 Share Posted August 24, 2012 To be honest, if you were clever enough then they'd never find out. Parents take out cash from their bank, and give it straight to you. As long as you don't put it all into your account in one go, or even better if it never touches a bank and you don't rush off and spend it on a Ferrari or anything daft, they'll never know. Whether you'd feel comfortable taking that risk is up to the individual. Quote Link to comment Share on other sites More sharing options...
Sarnie Posted August 24, 2012 Share Posted August 24, 2012 Nothing like a bit of Money Laundering Quote Link to comment Share on other sites More sharing options...
The Bounty Bar Kid Posted August 24, 2012 Share Posted August 24, 2012 IHT sucks which is why since I became 18, I've slowly acquired everything my Dad and Mum owns. Quote Link to comment Share on other sites More sharing options...
mbs Posted August 24, 2012 Share Posted August 24, 2012 IHT sucks which is why since I became 18, I've slowly acquired everything my Dad and Mum owns. Do they know? Quote Link to comment Share on other sites More sharing options...
Stew Posted August 24, 2012 Share Posted August 24, 2012 IHT sucks which is why since I became 18, I've slowly acquired everything my Dad and Mum owns. Just hope you never get divorced..... Only thing worse than seeing your parents money going to the taxman would be seeing it go to a women that you probably dislike! Quote Link to comment Share on other sites More sharing options...
4RE Leather Posted August 24, 2012 Share Posted August 24, 2012 IHT sucks which is why since I became 18, I've slowly acquired everything my Dad and Mum owns. Just hope you never get divorced..... Only thing worse than seeing your parents money going to the taxman would be seeing it go to a women that you probably dislike! There is no fear of Dip ever getting divorced is there mate:) meeeooowww Quote Link to comment Share on other sites More sharing options...
The Bounty Bar Kid Posted August 24, 2012 Share Posted August 24, 2012 IHT sucks which is why since I became 18, I've slowly acquired everything my Dad and Mum owns. Just hope you never get divorced..... Only thing worse than seeing your parents money going to the taxman would be seeing it go to a women that you probably dislike! There is no fear of Dip ever getting divorced is there mate:) meeeooowww True. True. That'd require a woman to want to go near me! Quote Link to comment Share on other sites More sharing options...
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