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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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If we give our son £20,000 house purchase will there

Resolved Question:

if we give our son £20,000 for a house purchase will there be a tax imnplication we are both on low incomes and the money comes from the sale of our house when we downsized to a smaller property.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Tax implications for son
Your son will receive the money free of tax as there is no tax on gifts.

Tax implications for you
The gift to your son would be regarded as a potentially exempt transfer (PET) for inheritance tax purposes and the seven year rule would apply to this gift. It means, if you survive for seven years after making the gift, no inheritance tax is due, irrespective of the amount.

More information on gifts and implication of these gifts on inheritance tax can be found here

http://www.which.co.uk/money/tax/guides/inheritance-tax-explained/inheritance-tax-planning-and-tax-free-gifts/

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

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