Gifting an amount tax free ?

[fastbikes76]

Evening All,

If a relative wanted to gift my wife and I a sum of 20K, what would be the way so we don't incur any taxes etc ? Is it as simple as them sticking 20K in our bank ? The money is a loan but not a loan, It is money that we can repay as and when we are in a position to do so, if ever. If it makes a difference the money is going towards other funds I have put aside for a deposit on a house.

Forgive what may seem a really stupid question, but this is new ground to me.

Regards

[fastbikes76]

DoubleSix said:

The individual making the gift has a £3000 annual allowance, if they haven't used last years allowance then that can be carried forward to make £6000 in total.

There is the ability to make regular gifts from income they can demonstrably prove is surplus too, but that wouldn't apply to a one off lump sum.

Ok, so as we have never been gifted any funds he can gift us £6000 and then presumably we pay tax on the remaining £14 000 ? At what rate would it be tax ? He can afford to gift this lump sum with ease due to his current financial position.

Many thanks

[fastbikes76]

Thank you, That clears that up.

So they can pretty much give us any amount they wish, which would be tax free, provided they live longer than seven years after gift.

[fastbikes76]

Much appreciated.

[fastbikes76]

red_slr said:

All is well, but remember the lender may want to speak to the person who gifted the money to check its not a loan..

Also your solicitor may want to see the source of the gift.

I did think of this shortly after earlier replies. I have a car worth CIRCA 10K that I intend to sell, could I sell it to my FIL for 20K and then everyone's happy ? Ultimately he is more than happy to provide proof of where the money comes from and that its a gift, but wonder if selling him my car is a better get around. I could then purchase the car back in a few years when we are settled.

[fastbikes76]

Its definitely all legit, and I would like to keep it that way. I'm just thinking of which way creates the least hassle for all. He is in a great financial position after selling a large property and downsizing meaning he now owns outright and has 100K+ kicking about. If he gifts us the money I believe he has to prove A) he has done so and B) where he has got the funds from. If I sold him the car I feel that negates the need for anything more than signing the V5 and a written receipt.

[fastbikes76]

I guess the car sale does complicate things unnecessarily, We will just stick with original plan of the 20K being gifted to us and sign whatever documentation is required.

Thank You.

[fastbikes76]

BoRED S2upid said:

Get him to gift 2x £10k rather than 1x£20k.

Can you tell me what the benefit is please ? Also gift us 10K each or jointly ?

Many thanks

[fastbikes76]

I wont be mentioning that, It will be a gift as far as anyone other than myself and FiL are concerned. To be fair its one of those, pay me back if you can, when you can things anyways.

[fastbikes76]

Eric Mc said:

You should be clear from the start as to what it is - a gift or a loan.

This sounds like a loan to me.

If there is ANY expectation of a repayment, then legally it is a loan.

I get that, having been stuck in the renting cycle for 10 years we have struggled to raise a large enough deposit while paying out 150K in rent. So it was a case of him giving us the 20K to top up what we have saved, and then if we find ourselves in a position to do so , we can pay him back. If we don't find ourselves in the position the 20K will be deducted from our share of any Inheritance. He is not remotely fussed either way and there will be no agreements or docs drawn up between us.