Dad offering to pay for my family holiday
Discussion
Kids recently started school
Usually had cheapo holidays out of school time
Now we must take them when they are mega expensive
Mentioned to dad that our usual holiday has gone from 1500 to over 4000 just for the booking (excluding travel and ice creams etc)
Dad said “what’s the balance left” - it’s exactly 4000
Now, he’s never helped me financially before and he is getting on a bit. I do a lot for them around the house garden etc and he helps my sister with £££. He has offered to treat us
The TLDR is there any tax implications if he pays for my holiday on his card?
I don’t want to get into dramas of transferring money through bank account and don’t want any raised eyebrows at tax return time etc
Cheers
Usually had cheapo holidays out of school time
Now we must take them when they are mega expensive
Mentioned to dad that our usual holiday has gone from 1500 to over 4000 just for the booking (excluding travel and ice creams etc)
Dad said “what’s the balance left” - it’s exactly 4000
Now, he’s never helped me financially before and he is getting on a bit. I do a lot for them around the house garden etc and he helps my sister with £££. He has offered to treat us
The TLDR is there any tax implications if he pays for my holiday on his card?
I don’t want to get into dramas of transferring money through bank account and don’t want any raised eyebrows at tax return time etc
Cheers
I am not an accountant or ifa, but my understanding is that it's IHT liability that could be affected here.
I think that parents can gift each of their kids up to £3k pa without any IHT liability, anything over that sum can be added to the value of the estate in the event of the parent dying within 7yrs of the date of the gift.
I think that parents can gift each of their kids up to £3k pa without any IHT liability, anything over that sum can be added to the value of the estate in the event of the parent dying within 7yrs of the date of the gift.
No issues.
Regular tax does not apply as its a cash gift.
IF he was to die in the next 7 years it *may* fall within IHT rules, but in reality given the sum its not anything to worry about.
Even then, its likely you would be able to claim nil tax under the cash gift allowances as this is the first gift he has given you and you can roll 2 years into one so its still under for IHT.
IMHO. IANANFA>
Regular tax does not apply as its a cash gift.
IF he was to die in the next 7 years it *may* fall within IHT rules, but in reality given the sum its not anything to worry about.
Even then, its likely you would be able to claim nil tax under the cash gift allowances as this is the first gift he has given you and you can roll 2 years into one so its still under for IHT.
IMHO. IANANFA>
2HFL said:
He’s literally gifting you some money, very generously, by way of paying the balance of your holiday?
I am sure that’s allowed, so I cannot see why this would have a single tax implication. It’s got sweet FA to do with anyone else!
Parents can gift however much they like to their kids, yes. But there are certainly IHT implications for larger sums. The taxman won't just let you give it all away to avoid IHT;)I am sure that’s allowed, so I cannot see why this would have a single tax implication. It’s got sweet FA to do with anyone else!
PistonHead007 said:
£3,000 annual exemption for this tax year and the last covers the gift so no IHT implications. There'd only be a potential issue if he's worth more than his available nil rate bands anyway. Get on and enjoy.
If the gift is out of his annual income, then you don't have to worry about the Annual £3,000 threshold either.Inheritance Tax (IHT) is ONLY about gifts or inheritances from a person's estate. If the gift is not from their estate, then IHT is of no concern at all.
Eric Mc said:
PistonHead007 said:
£3,000 annual exemption for this tax year and the last covers the gift so no IHT implications. There'd only be a potential issue if he's worth more than his available nil rate bands anyway. Get on and enjoy.
If the gift is out of his annual income, then you don't have to worry about the Annual £3,000 threshold either.Inheritance Tax (IHT) is ONLY about gifts or inheritances from a person's estate. If the gift is not from their estate, then IHT is of no concern at all.
Eric Mc said:
If the gift is out of his annual income, then you don't have to worry about the Annual £3,000 threshold either.
Inheritance Tax (IHT) is ONLY about gifts or inheritances from a person's estate. If the gift is not from their estate, then IHT is of no concern at all.
At what point does cash from income, sat in an account, become part of an estate?Inheritance Tax (IHT) is ONLY about gifts or inheritances from a person's estate. If the gift is not from their estate, then IHT is of no concern at all.
Defcon5 said:
Eric Mc said:
If the gift is out of his annual income, then you don't have to worry about the Annual £3,000 threshold either.
Inheritance Tax (IHT) is ONLY about gifts or inheritances from a person's estate. If the gift is not from their estate, then IHT is of no concern at all.
At what point does cash from income, sat in an account, become part of an estate?Inheritance Tax (IHT) is ONLY about gifts or inheritances from a person's estate. If the gift is not from their estate, then IHT is of no concern at all.
Usually it can be determined by looking at the circumstances of the person making the gift - but it can be a bit vague.
Eric Mc said:
Defcon5 said:
Eric Mc said:
If the gift is out of his annual income, then you don't have to worry about the Annual £3,000 threshold either.
Inheritance Tax (IHT) is ONLY about gifts or inheritances from a person's estate. If the gift is not from their estate, then IHT is of no concern at all.
At what point does cash from income, sat in an account, become part of an estate?Inheritance Tax (IHT) is ONLY about gifts or inheritances from a person's estate. If the gift is not from their estate, then IHT is of no concern at all.
Usually it can be determined by looking at the circumstances of the person making the gift - but it can be a bit vague.
OP - I think you may be overthinking this.
The first question is - does he have more than £325k in his estate (excluding his house). If not then there's nothing to worry about. if the answer is yes then there are various other allowances / time limits that will mitigate any tax liability.
As an absolute worst case scenario if he gives you £4,000 then the most you'll need to repay is £1,600(and that's if he drops dead within the next 12 months)
The first question is - does he have more than £325k in his estate (excluding his house). If not then there's nothing to worry about. if the answer is yes then there are various other allowances / time limits that will mitigate any tax liability.
As an absolute worst case scenario if he gives you £4,000 then the most you'll need to repay is £1,600(and that's if he drops dead within the next 12 months)
pork911 said:
Eric Mc said:
Defcon5 said:
Eric Mc said:
If the gift is out of his annual income, then you don't have to worry about the Annual £3,000 threshold either.
Inheritance Tax (IHT) is ONLY about gifts or inheritances from a person's estate. If the gift is not from their estate, then IHT is of no concern at all.
At what point does cash from income, sat in an account, become part of an estate?Inheritance Tax (IHT) is ONLY about gifts or inheritances from a person's estate. If the gift is not from their estate, then IHT is of no concern at all.
Usually it can be determined by looking at the circumstances of the person making the gift - but it can be a bit vague.
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