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Thomas
Thomas, Lawyer
Category: UK Property Law
Satisfied Customers: 6516
Experience:  BA (Hons), PgDip, Practising Solicitor
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Hello, I am looking to purchase a home (my first) and my

Customer Question

Hello,

I am looking to purchase a home (my first) and my parents wish to make me a gift of £50,000 to assist with my deposit. My query is - to what extent will I be liable for tax on this gift?

Thank you,
Kate
Submitted: 2 years ago.
Category: UK Property Law
Expert:  Thomas replied 2 years ago.
Hi Kate,


Thanks for your patience.

You will not be liable for any tax on the gift. It is not income and so not subject to income tax. Neither is cash a capital asset for the purpose of CGT.

However, if this is a genuine gift and nothing is being given to your parents in exchange for it then it will be a Potentially Exempt Transfer for the purpose of Inheritance tax on your parent’s estates.

If they survive 7 years from the date of the gift then none of the value of the gift will be included in valuing your parent’s estates for IHT purposes.

If they pass away between 0-2 years of the date of the gift then the whole of the amount will be included in their estates for IHT purposes. If they pass way between 2-7 years of the date of the gift then only a percentage will be included in the estate for IHT purposes. The relevant percentages are here:-
http://www.hmrc.gov.uk/inheritancetax/how-to-value-estate/gifts.htm#4

See “Applying ‘Taper Relief’ to gifts“ on the above link.

Unless otherwise specified, the estate (not you) will bear the burden of paying any IHT payable on the gift.

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Kind regards,


Tom
Thomas, Lawyer
Category: UK Property Law
Satisfied Customers: 6516
Experience: BA (Hons), PgDip, Practising Solicitor
Thomas and 4 other UK Property Law Specialists are ready to help you
Expert:  Thomas replied 2 years ago.
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