Capital gains tax????

[Pampam]

Hello heres a question for anyone who has a clue about the inland revenue :if my dear old dad wanted to give me a considerable amount of money £130,000 what would i have to do regarding the tax man would he want his pound of flesh (well obviously he would )but does anyone know how much and what would i have to do ? Is this what is called capital gains ,he would rather we had it now than wait until he passes away ,pp :(. (Morbid i know) but i dont understand gobbledegook ont internet

[Robinhood]

...AFAIK, there are no Tax Implications at the time of the gift.

 

There are, though, likely to be tax implications if the giver dies before 7 years have expired.

 

Capital Gains tax doesn't come to bear, the issue is IHT (Inheritance Tax).

 

You can gift up to £3000 per year with no IHT implication.

 

Anything above that threshold will be effectively taxed at death, under IHT rules, unless 7 years have passed since the gift; in the latter case, no tax is due.

 

The following gives a pretty good summary of how it all works:

 

http://www.money.co.uk/article/1004329-how-do-i-gift-money-without-being-taxed.htm

 

Edited to add that:

 

IHT is paid at 40% of the amount in excess off the nil rate allowance (which is currently £325,000). For a surviving member of a married couple, there are certain, very common, circumstances under which any unused allowance from the first to die, can be passed to the second, allowing a maximum of £650,000 to be nil rated.

 

Essentially, if your dad is not expecting to spend the money himself, then the final tax position is unlikely to be worse if he gifts you money, and could end up being better (if he survives 7 years). If the total value of his estate (including the gift) falls within the nil rate band (min £325,000, max £650,000) then it makes no difference at all (although tax law may change in the future).

 

I'm not a financial adviser (god forbid!) and it is likely that one might find a tax avoidance scheme if any tax were payable, but the above is written in good faith, as my current understanding. (e&oe ;-))

[Pampam]

Wow that sounds better than what i expected i thought id have to pay 28% capital gains cheers robinhood pp:)

[Guest pelmetman]

130k that's almost enough to buy Horace Pam..............but not quite :D...............Will you be retiring now? B-).............

[Pampam]

Will check its a straightforward gift first (tax etc ) he wants us to buy another motorhome ,but we still working (usually on opposite days) so still have same problem of little spare time; and dependent older relations ,so wouldnt be able to take off for long periods :have bought a transit ,so might be doing some mods to turn it into a dayvan .......... Till i adopt horace ! Am selling "stuff " from old van on ebay like awning and windscreen cover,and its quite addictive,have been ferriting thru workshop for all other saleable items and might purchase an inflateable awning or a very old tiny caravan (husbands not into caravans at all ) but i do like things from years ago especially old hymers, and some of the old caravans :oh boy would i love to retire,but its not feasable yet : sorry am rabbiting on pp:)

[Mel B]

Pampam ... be VERY careful, it isn't only IHT and capital gains tax you have to be aware of!

 

You have to also consider the implications for the future in terms of care home etc type costs, AFAIK there is NO limit on the length of time which has passed so the 'authorities' can take it into account in the future for any costs associated with looking after your dad - once any money in his name has run out what he's given away can also be considered to be deemed 'deprivation of assets'. A lot appears to depend on his state of health/likely care needs in the near future and I would suggest that you take some legal and specialist advice on this before your Dad does anything.

 

http://www.fundingcaring.co.uk/giving-away-assets-to-avoid-paying-for-care.html

[Pampam]

Yes theyll get his other savings and his state pension and private pension , "eat the flesh then come back for the bones" he might be better off hanging on to it ,in his thinking he wanted us to have another motorhome but i keep telling him we havent got time cos of work bless him. His advisor will probably put him straight eh?actually i will def take some advice because whats supposed to be a nice thing eg a gift is getting a bit stressy thinking of implications etc : makes you wonder if its worth ever saving dont it?? Pp :)

[Guest pelmetman]

Pampam - 2014-08-17 6:21 AM

makes you wonder if its worth ever saving dont it?? Pp :)

 

You raise a valid point Pam ;-)....................Who was your Dad saving for?................You or the government :-|...............

 

My approach has been to work out what our income will likely get when we've retired.........and then get used to living on that amount................many people struggle to get by when they retire, because they carry on spending at the same rate, as when they were receiving a wage *-)................

 

I'm confident we'll be quite comfortable on our eventual retirement income B-).................

 

Could you not use your Dads money to semi retire? ;-)............

 

 

[Pampam]

He hasnt been a big "saver" in the frugal way ,loved his MGB 's tootling off to france " war &wine" and off to scotland "walking and whisky" and nice food & music collecting books (thousands the walls are full of em) in fact ive always admired his ability to get the balance of enjoying his life just right : i dont think you can say that of most people :- comfortable in his own skin :- Pp:)

[Guest pelmetman]

Pampam - 2014-08-18 8:30 PM

 

He hasnt been a big "saver" in the frugal way ,loved his MGB 's tootling off to france " war &wine" and off to scotland "walking and whisky" and nice food & music collecting books (thousands the walls are full of em) in fact ive always admired his ability to get the balance of enjoying his life just right : i dont think you can say that of most people :- comfortable in his own skin :- Pp:)

 

Could not agree more with your Dad B-)........................

 

My parents in my view wasted their retirement .................they both carried on working until they were 70 because they kept changing their campers :-S..............when they finally retired they sold up and moved to Spain.........

 

Mum was dead within 2 years, never got to move into their house due to Spanish manana building practices :-|.................Dad spent the next 8 years on his own :-S...........Only used their nice shinny Hymer to drive to Spain, and the family drove back with him twice as he was to dangerous to be allowed out alone 8-).........

 

I've no intention of following in their footsteps :D..................