Money Gift tax liabilities

[loca]

My dad has been left �50k as his mother has passed away. He wants to give it to me for half of their house value as my brother still lives in their house and will continue to do so when my parents pass away, so he wants me to have my share now. Will i have to find any tax on it? My parents house is valued at �130000 they have no savings and no other assests as my dad is disabled and not been able to work since the 70's.

[Buenchico]

There is no tax, per se, on gifts.

If your father was to die within 7 years of giving you the gift, it would be taken into account (as part of his estate) when calculating inheritance tax.

However, there's no inheritance tax due in respect of an estate valued at less than �300,000 so (unless your father wins the National Lottery jackpot between now and his death), there will be no tax to pay on the gift:
http://www.direct.gov.uk/en/MoneyTaxAndBenefit s/Taxes/InheritanceTaxEstatesAndTrusts/DG_4016 736

Chris

[Peter Pedant]

This sounds like a good deal.

I presume you wouldnt mind �50k now.

You [all] do it by a Deed of Variation on your gran's will, and then you get the �� directly . A tax charge for you doesnt arise as any inheritance tax is paid for by your gran's estate - that is has been paid for already

There will be a solicitor involved in your gran's will, and contact him and ask him to do it - there will be a charge and you can ask him how much, it shoul dbe a few hundred which on a lump sum of �50k is less than 1%.

Oh, and you should all sign a document saying yo giv eup all claim on your father's estate as a result of this transfer. Memories kinda get fuzzy after 20 years.

[loca]

Thank you for your replies. We were thinking of opening a joint bank account to put the cheque in and when it clears then have my dad's name taken off. instead of doing a deed of variation. However, my partner and i get working tax and child tax credit. Will i have to declare it to them as TRUST income although it is not been left directly to me from my nan. Trust income is defined in the tax credits renewal pack as being 'receiving income from a trust, settlement of a deceased person's estate, the trustees or administrator will have given you (my dad)a certificate telling what income was paid and it says you have to include the gross income on the trust income. As he is gifting me the money by having his name taken off the account, will this still be deemed as trust income.

[Peter Pedant]

Hi loca

This is a completely different question to the one you posed above.

The situation you describe of getting odd sums from an account in someone else name, for your benefit rather obviously would be deemed as trust income.

IF you got the whole �50k then it would be capital and subject to the same rules as savings - whatever they are.


These are questions which are very different in nature to how do I get my hands on �50k from my gran.

[loca]

Sorry, i obviously didn't explain well enough. My father is giving me the whole amount. (�50k) We are opening an account together initially, as the cheque from my nans estate will have my father's name on it. When the cheque clears my dad will take his name off the account and so the account and the money will be soley in my name. Doing it this way we won't have to find a charge for deed of variation. What i was trying to ask, and quite rightly, as you pointed out, is another question, is would it be deemed as trust income although it was left to my father in his name, as being on working and child tax credit you have to declare trust income on the form? Would it still be deemed as trust income for myself even though i was not the initial beneficiary of my nans estate as my dad has gifted his trust income to me? Hope i have explained better, sorry for the confusion, and thank you for your replies, much appreciated.