Gifting an amount tax free ?
Discussion
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
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
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.
I should add; the gift will not be treated as income as far as you are concerned, if that helps.
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.
I should add; the gift will not be treated as income as far as you are concerned, if that helps.
Edited by DoubleSix on Monday 30th January 20:24
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. 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.
Many thanks
fastbikes76 said:
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
All is well, but remember the lender may want to speak to the person who gifted the money to check its not a loan..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
Also your solicitor may want to see the source of the gift.
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. Also your solicitor may want to see the source of the gift.
fastbikes76 said:
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. Also your solicitor may want to see the source of the gift.
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 said:
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.
The problem is that should the lender want to look into things then there would be a car sold for far more than the market value, which would raise questions and *potentially* prevent you from ever getting a mortgage again. It could be seen the same as selling a can of beans for £20k: questionable.As mentioned there is no need for it, unless they need a car in which case sell the car for £10k and take a £10k gift, with the paperwork to say it's a gift. House purchases are funded by gifts from relatives all the time, it will be of no problem so long as they sign the paperwork to say so.
fastbikes76 said:
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.
It's very routine - did it for my daughter and the conveyencing solicitor just sent a form I had to sign confirming it was a gift. Some of the answers above are making a pigs ear of it.You need to be careful not to say things like this:
fastbikes76 said:
The money is a loan but not a loan,
Sheepshanks said:
fastbikes76 said:
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.
It's very routine - did it for my daughter and the conveyencing solicitor just sent a form I had to sign confirming it was a gift. Some of the answers above are making a pigs ear of it.You need to be careful not to say things like this:
fastbikes76 said:
The money is a loan but not a loan,
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