Any tax implications /hassle with 20k gift from parent?

[steveo3002]

my mother is paying tax on her savings and used up her isa allowance , we would like to move 20k to me so i can open an isa

is it as simple as that , i wont be expected /flagged to pay tax on it like it was earnings etc

[mikey_b]

As long as she doesn't die within the next seven years, no implications.

If she does die within that timeframe, all or part of it will be included in calculations for possible inheritance tax.

[steveo3002]

yes aware of the inheritance tax

just didnt want a light to go off somewhere that mr steve has earned an extra 20k on the sly , would be a bank to bank transfer not a cash deposit lol

[alscar]

Other than the inheritance tax point I would just be tempted to keep a note of the transaction and maybe just print off your latest bank statement showing the incoming £20k ?
I’ve done this for gifts to my children / wedding / house deposit etc.

[SturdyHSV]

If you have a SIPP, she can pay the 20k in to that, you'll then get another 5k from the Government (20% tax relief), and can claim another 20% if you're a higher rate tax payer.

If you have earnings outside of PAYE as well then the fact that she paid the money in is irrelevant, it's treated as a contribution to your SIPP, and so can reduce your tax bill.

[pork911]

isn't her loss of £20k going to be far more than any tax on interest she is paying?

[egomeister]

She can also gify 3k per year tax free, and use last years allowance retrospectively if it hasn't been used so that could take things down to 14k

[steveo3002]

pork911 said:

isn't her loss of £20k going to be far more than any tax on interest she is paying?

on the basis im getting it one day anyway ...might as well sit there earning tax free than not

[omniflow]

The other (or possibly additional) option you could consider is getting your Mum to gift you her excess income. There are different rules about this, and I don't THINK it falls under the 7 year rule.

This is something I'm just starting to work through with my Mum at the moment. She has plenty of savings, and has about £600 left every month that she simply can't spend. My current thinking is that she puts this to one side, and once a year decides what to do with it. If I have my way, she'll split it equally between her grandchildren. However, I won't be "having my way", there will be some gentle suggestion and she can make up her own mind.

[highpeakrider]

steveo3002 said:

pork911 said:

isn't her loss of £20k going to be far more than any tax on interest she is paying?

on the basis im getting it one day anyway ...might as well sit there earning tax free than not

Unless she has a need to go into a self funded care home and needs the £20k…..

[steveo3002]

highpeakrider said:

Unless she has a need to go into a self funded care home and needs the £20k…..

im her son ffs , i can give it back just as easy

[55palfers]

Move it in staged £5K batches perhaps. Less visibility to HMRC?

[pork911]

steveo3002 said:

pork911 said:

isn't her loss of £20k going to be far more than any tax on interest she is paying?

on the basis im getting it one day anyway ...might as well sit there earning tax free than not

If that's how you choose to live.

[Cupid-stunt]

pork911 said:

steveo3002 said:

pork911 said:

isn't her loss of £20k going to be far more than any tax on interest she is paying?

on the basis im getting it one day anyway ...might as well sit there earning tax free than not

If that's how you choose to live.

Makes perfect sense ot me.
My old man gave me a chuck when I bought my house 13yrs ago - he said I'd rather see you use it now than when I'm gone.
Not quite the same as just a tax play, but transfer of wealth sooner rather than later.

[98elise]

55palfers said:

Move it in staged £5K batches perhaps. Less visibility to HMRC?

No need. There is no tax to pay unless she dies within 7 years as has been said before. Same rules apply to 5k or 20k.

[fasimew]

What if you sold her something for 20k, say a biscuit?

[uknick]

98elise said:

No need. There is no tax to pay unless she dies within 7 years as has been said before. Same rules apply to 5k or 20k.

And, that's only if her estate will attract IHT once you take into account any NRB and main residence relief.