Transferring money between family members

NotAGolf

NotAGolf

NotAGolf

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What are the rules about transferring money between family members?

If for example I had saved a lot of money and wanted to help my brother out, or my son, what's to stop me just transferring 5k, 10 or even 50k to them?

Would it be subject to any form of tax or involve some questioning to ensure that money laundering hasn't taken place?

I know there is inheritance tax and capital gains tax when you die and pass on your estate, so I presume these taxes still apply even if death is not involved? Otherwise what's to stop people transferring assets to their children when they hit say 60 to avoid them having to pay capital gains or inheritance tax when they kick the bucket several years later?
 
Something like a maximum one off gift up to 10k. If you die within something like six years of it it becomes subject to inheritance tax.
 
I seem to remember if you give them a lot of money you incur inheritance tax but if you buy them the new item - house/car etc it is ok. Then transfer the deeds to them? I think that's legal.

Can you not buy the items for him?
 
helpimcrap said:
I seem to remember if you give them a lot of money you incur inheritance tax but if you buy them the new item - house/car etc it is ok. Then transfer the deeds to them? I think that's legal.

Can you not buy the items for him?
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It's legal to buy something or gift cash. If you cark it they pay inheritance tax (unless you live for 7 years)
 
https://www.gov.uk/inheritance-tax/gifts

The original owner must live for 7 years after giving the gift. Any gifts made less than 7 years before death count towards the Inheritance Tax threshold (£325,000). They count towards the threshold before the rest of the estate.

If the donor gave away more than £325,000 of gifts in their final 7 years, tax is due on everything over that threshold.

The rate of tax is reduced for gifts made between 3 and 7 years before the person died. This is known as ‘taper relief’.
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The estate doesn’t pay Inheritance Tax on up to £3,000 worth of gifts given away by the deceased in each tax year (6 April to 5 April). This is called the ‘annual exemption’.

Leftover annual exemption can be carried over from one tax year to the next, but the maximum exemption is £6,000.

Certain gifts don’t count towards the annual exemption and no Inheritance Tax is due on them, eg wedding gifts and individual gifts worth up to £250.
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In short, you can give anyone you like £3k a year without IHT spotting it, any more and it's taxable if you die within 7 years of giving it.
 
You can give someone up to £3000 per year without any issue or inheritance tax considerations.

Any amount over will be liable for inheritence tax if you die within 7 years. However it is a sliding scale, so if you were to die in 5 years, less tax would be due compared to if you died next year.

As far as I am aware, there are no other taxes to consider. You can give someone £100k tax free as long as you don't die in 7 years!

More info here.

Edit: As above ^^!
 
Oh I should probably add the only other time someone might take an interest is when you're applying for a mortgage.

My parents lent me some cash to help with my deposit for my first house and when the bank spotted the money going into my account they refused to give me a mortgage unless my parent signed a letter stating they had no interest in the house and can't ask for the money back.
 
how about when its just a bank transfer?

I borrowed my mum and step dad 10k for their deposit, went through no probs. then got it back within 12 months.
 
SiD the Turtle said:
https://www.gov.uk/inheritance-tax/gifts






In short, you can give anyone you like £3k a year without IHT spotting it, any more and it's taxable if you die within 7 years of giving it.
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From that description you could actually give an issue 6K gift without any IHT risks and then 3K a year after, since t says you can roll over the allowance to the next tax year but now more than 6K.
 
SiD the Turtle said:
Oh I should probably add the only other time someone might take an interest is when you're applying for a mortgage.

My parents lent me some cash to help with my deposit for my first house and when the bank spotted the money going into my account they refused to give me a mortgage unless my parent signed a letter stating they had no interest in the house and can't ask for the money back.
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My and my sister gave our inheritance from when our dad passed away to our mum so she could buy a bungalow. Haven't heard nowt about it.
 
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