Bank of mum and dad

#1
Seems to be a common occurrence theses days, but how do you pass money to your children to assist with house purchase with out paying getting stung for tax

Any ideas and advice

Archie
 

Ravers

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#2
I believe you can give them as much as you want, however if you die within 7 years of making that gift, it will be subject to inheritance tax.

So basically don't die in the next 7 years.
 
#3
Give as much as you like, just make sure you live for at least 7 years after, otherwise it becomes taxable.
 
#5
Start as soon as they are born. Their own account with as much as you can spare every month.

Give a large sum , as much as you can but do not die for at least 6 ? Years after.
 
#6
Cash. If you're having trouble with large sums just pass it through me.
 

Auld-Yin

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#7
If anyone has spare cash, large or really large amounts, and don't know what to do with it then just send to me. I promise not to tell HMRC.

Simples:albino:
 
#9
If you're able to take the longer view: pay as much as you can into a pension, such payments are also free of income tax. Then, when you're old you will have a better income and consume less of their inheritance (especially if you die early!)
 
#10
I've got nowt to give my kids, but my Mum is happy to spend my inheritence on them! She has just given my daughter a good sum for the deposit on her first house purchase. All fine, but she had to jump through numerous hoops and write lots of letters assuring the Bank she was giving the cash as a gift, and would not seek its return or an interest in the house. It seems the Banks are the issue, not HMRC.
 

Ravers

LE
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#11
Start as soon as they are born. Their own account with as much as you can spare every month.

Give a large sum , as much as you can but do not die for at least 6 ? Years after.
What if they turn out to be little cnuts?

In all seriousness I know a few people who have set up fat trust funds for their brats, put their life savings into it, then at 18 the kids have blitzed it all on weed, a suped up Golf GTI and 6 weeks in Pattaya. Legally the money is their's and there is nothing you can do about it.

Most of my wife's older brothers and sisters did exactly that.

Of course no one hopes their kids will behave like that, but I'd consider keeping some of the cash back so you have some control.

We've set up child trust funds for our two, once the funds reach 10 grand, we're not putting anything else in. We'll set up ISAs in our names instead and pay into that.

On their 18th birthdays the kids will be presented with a choice.

Here's 10 grand, you can:

A) Blitz the lot and have some fun for a few months.
B) Spend it on something worthwhile and we'll double it.
 
#12
Seems to be a common occurrence theses days, but how do you pass money to your children to assist with house purchase with out paying getting stung for tax

Any ideas and advice

Archie
So f**king simple.

Give them the cash and live for 7 years.

For smaller amounts you can gift £3.5k tax free a year with the added bonus that if you haven't done it before you can do the previous year as well I.e £7k.
 
#14
Either that or you could buy your child's 1.6tdi 2007 Ford Focus for £20k
I 've wondered about something like that. What's to prevent me invoicing my son for raking the lawn at £10k a pop, or some other inflated form of money exchange so I get money into his savings that isn't seen as a 'gift' but is for 'services rendered'.
 
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#15

Ravers

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#16
I 've wondered about something like that. What's to prevent me invoicing my son for raking the lawn at £10k a pop, or some other inflated form of money exchange so I get money into his savings that isn't even as a 'gift' but is for 'services rendered'.
He'd have to pay income tax on it.

The tax man knows his shit. They've seen every trick in the book.

Easiest way to do it is buy agricultural land / property which is not subject to inheritance tax. Give them the land, they can then sell it after you're dead, although they will pay capital gains tax on any increase in value.
 
#18
So f**king simple.

Give them the cash and live for 7 years.

For smaller amounts you can gift £3.5k tax free a year with the added bonus that if you haven't done it before you can do the previous year as well I.e £7k.
That would not pay the fees for a house purchase let alone a deposit

Archie
 
#19
With the seven year rule. Have a life assurance policy written out for the extra amount of tax IN TRUST. Consult the local tame trusted IFA and they can arrange some nifty legal stuff.

The other thing is just drip feed extra cash as and when the children need it. I have the cash but to keep my mothers cash/tax/paying for care later down as such she pays for my car servicing, random household expenses etc. I can cover the cash very easy but by her spending her inheritance on me now, I salt away my savings now.
 
#20
That would not pay the fees for a house purchase let alone a deposit

Archie
Start early before they need it. Within five years you're up to £21k.

As has been said, just gift it and life for 7 years. You can die earlier but there's a reducing scale of tax so there's less tax to pay the longer you live.

As a mate of mine who is a tax accountant said to me, HMRC isn't going to care about you. It's theBransons of this world who have the potential to give their kids millions they're after.

Out of interest, how much are you talking about.
 

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