How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • Go back-and-forth until satisfied
    Rate the answer you receive.
Ask Sam Your Own Question
Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 16237
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
16196420
Type Your Tax Question Here...
Sam is online now

This question is only for., I have a question please. As I

This answer was rated:

This question is only for Sam.Hi Sam, I have a question please. As I have stated here, my father is a sole trader for his business overseas. He does not have any link/business with UK. I loaned his business some money before and his business repaid partially money. I have all the letters covering the loan was interest free.Now, I want to buy house here and need some help from him for the deposit. He is ready to transfer 20k from his personal account from overseas. He will draft a letter to the lender that the money is a gift and he will not claim any part of the ownership of the property. Would it be ok to accept gift from him ? do I have to pay any UK tax on this gift ? The money will be coming from his own personal account.Thanks,
Customer: replied 8 days ago.
Please see the notes - This question and order is only for Sam. She knows the history and I would like to get advice from her only.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Hi

This is absolutely fine as you will have a letter detailing the gift to you which matches the payment received and the date its made

There will be no tax due on you for receiving the gift and no tax consequence on him as you will remain sole owner of this property

Thanks

Sam

Customer: replied 8 days ago.
Thanks for picking this up. I was worried only because if you see on my previous questions, I have made loan to his sole trader business. and HMRC should not treat this gift as my income. there is no chance that I can have any income from his business because he is a sole trader(a shop owner). I will be getting a letter detailing the gift and the money comes from his personal bank account.
Customer: replied 8 days ago.
Also, How long would I need to keep the letter with me ? is there any timeline that HMRC can ask for the letter ?

Hi

Even then it would be treated as a loan being repaid and still not liable to tax as you have not charged him interest

Keep the letter for as long as you need to so usually seven tax years (this has been reduced t three but hang on to it for the longer duration)

Thanks

Sam

Customer: replied 8 days ago.
Thanks for you reply. The remaining loan is around 7k and he will be transferring 20k from his personal bank account. Shall I ask him for the remaining money letter or fill amount ? The loan was made by me to his business account.

Hi

Thanks for your response

It doesn't matter whether he states its £7K loan repaid and £13K gift as I assume that's what the true arrangement will be ?

Thanks

Sam

Customer: replied 8 days ago.
That is the true arrangement and I will be producing this gift letter to bank as well for the mortgage. We can also provide his self return or audited accounts and show that there is no gain to me from his business what’s so ever. He runs a shop overseas and I don’t have any interest there. The money is purely a gift from a father to me. The loan will stand as it is to his business and he will be gifting money from his own personal bank saving account.

Hi

Then that is fine

Thanks

Sam

Sam and other Tax Specialists are ready to help you
Customer: replied 8 days ago.
Thank you!

You are vwey welcome

Thanks

Sam