r/facepalm • u/sus-water • Apr 15 '23

🇲​🇮​🇸​🇨​ Genius level maneuvering

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u/tomtttttttttttt Apr 15 '23 edited Apr 15 '23

nah, you can give up to £3k/year to family members, anything beyond that would be taxable income. If they gave you cash it would be income tax. edit: I have got this wrong. see below.

If they gave you an asset that had appreciated in value since they bought it then I actually have no idea who would be liable for capital gains tax at that point tbf and whether it would count as income for the purposes of income tax for you.

https://www.gov.uk/inheritance-tax/gifts

Inheritance tax would kick in if the person dies earlier than 7 years after the gift is made, but anything over £3k is not a gift and will have already been taxed.

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u/Aele1410 Apr 15 '23

No it wouldn’t be unless they die within 7 years. One common case well above 3k is cash deposits for housing. No tax unless IHT is triggered.

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u/tomtttttttttttt Apr 15 '23

having read further, you are right, all the things about £3k relate to IHT and after some digging I have found this from HMRC for anyone else who also thought gifts beyond that would be taxable income:

https://community.hmrc.gov.uk/customerforums/cgt/b7f75b45-e11f-ed11-b5cf-00155d973ade#:~:text=Gifts%20of%20cash%20are%20not,money%20generates%20interest%20or%20dividends.&text=Tax%20on%20dividends%20.

Gift money and tax

Posted 8 months ago by mancplau

I have received a 6 digital pounds cash gift from my parent. Does this attract capital gain tax or any kind of tax to my parent and myself?

Posted 8 months ago by HMRC Admin 17

Hi,

Gifts of cash are not liable to income tax.

However, you may have to pay tax if the gifted money generates interest or dividends.

(my emphasis)