Cocker

iTrader: (3)

Wont bore you with all the details but can my parents give me 150k?

Would there be any legal/tax issues etc???

Reffro

Only if they die in the next 7 years, then Inheritance tax will take effect, otherwise they can gift away.

*2.0hdi*

big tax issues

if you could that no one would inheritense tax
it can be done but what the limit is before gordon brown and the solialist w***ers want there piece i'm not sure, at a guess about 5k a year

jaytc2003

iTrader: (1)

I think that if they gave you a gift then it would not be taxable etc, however I am sure there is some kind of 7 yr rule, so say your parents were unfortunate enough to be put into care and they could not afford to pay for their care then they can look at things going back 7 yrs and do something that way. This can be done with property that has been signed over as well. Probably not explaining that very well and sure someone will be along shortly.

SJ_Skyline

Giving Money to your Children

jaytc2003

iTrader: (1)

drat, to slow

Cocker

iTrader: (3)

They are both alive and kicking (touch wood)

I thought inheritance tax had a limit of 300k or somthing before it kicked in?

SJ_Skyline

£285,000 is the limit but your parents have to die for this to kick in. I suspect you would otherwise be liable for income tax on a significant portion of the £150K.

MattW

Income tax only applies on INTEREST if the money is invested for the child.

"If you give money to your children, or you invest it for them, you may have to pay tax on the interest."

Mick

iTrader: (1)

That link says £285,000 and 40% tax on anything beyond that

MattW

Cocker, short and curlies are that it becomes a PET or Potentially exempt Transfer. Info from the gov site below.


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If you, as an individual, make a gift in any of the situations described below and it isn't covered by one of the exemptions already described, it is known as a 'potentially exempt transfer' (PET). A PET is only free of Inheritance Tax if you live for seven years after you make the gift.

Gifts that count as a PET are gifts that you, as an individual, make to:

another individual
a trust for someone who is disabled
a bereaved minor's trust where, as the beneficiary of an Interest In Possession (IIP) trust (with an immediate entitlement following the death of the person who set up the trust), you decide to give up the right to receive anything from that trust or that right comes to an end for any other reason during your lifetime - see example below
Example: a wife is the beneficiary of assets in an IIP trust under her husband's will and the minor child a beneficiary of income, but the wife decides to give up any interest in the assets and these also become held in trust for the bereaved minor child.

Changes introduced by the Finance Act 2006 mean that lifetime transfers into other types of trust since 22 March 2006 no longer qualify as PETs.

jaytc2003

iTrader: (1)

this is England (wont say Gt Britain), any excuse and they will have your money

Brendan Hughes

BTW, is this cash, or a property to be made in your name? I think there may be different rules if property.

Cocker

iTrader: (3)

A bit of both really. They would in effect give me the cash as a deposit so i could by a 2nd house for them to live in until they pop there clogs. I guess the same rules would apply as "gifting your home"

*2.0hdi*

this wouldn't work as your parents have to pay rent to you at the going rate
so it might aswell be there house

socialist w***ers, can't stand them

Longjing

The rules on reservation of benefit predate the labour government comfortably.

My advice is - talk to someone who knows something about it. There is some sensible advice on this thread but also some total cobblers.

If cash, then a gift is a potentially exempt transfer as above. If it's an asset, then various other rules apply - they might be liable to pay gains tax if the thing has increased in value (because they are 'disposing' of the asset), and if land there may be stamp duty land tax to pay too.

Prasius

iTrader: (1)

Of course if they gave it to the labour party it would be tax free AND they get an MBE for it.