Uk Money Matters

[slippery when wet]

My mother is nearing about 70 years of age and has decided that she wants to sell her property as she is rattling around in a large house and wants to purchase a smaller property instead.

With the cash left over she would like to give both myself and my brother about GBP 10k each.

Personally I dont see a problem with this apart that I would like to see her enjoy her money herself but she is adamant about the fact that she wants to do this.

I feel that it is her money and she should be able to do as she pleases with it but the problem is that she has seen a financial adviser and that he has told her that she cant just hand over money. I am not sure of the full reason for this whether it is because of taxation ( I' guessing that it is because it would be classed as unearned income but I am not entirely sure that this is the real reason)

Would anyone have any suggestions as how to avoit these restrictions as my mother is very straight and needs to do everything by the book as she is a worrier and this would give her piece of mind.

Any advice would be greatly appreciated.

Thanks

[cmsally]

You can give away a certain amount of money every year (gift allowance for children etc) and it will be tax exempt. Sorry can't remember the figures but they are on the IR website.

If you (your mother) haven't used this gift allowance the previous year I think you can use that too.

Failing that (large amount) you can make a gift (PET) which will be exempt from tax after 7 years.

Sorry I was very into this subject last year but the figures have all slipped from my brain.

But you can check this on the Inland Revenue website.

Someone else can probably fill in the details.

[tijnebijn]

I am sorry ,but me and many others(I think)are not sure what you mean.I asume your mother lives in Uk and you in Thai.What would be the problem anyway?I do not know about taxation in the Uk,but in mine(Netherlands)a parent can give to a total of ...amount to children.If it is over that amount,your mum could consider to give it to you in parts...maybe smart idea.Also not clear to me is that,maybe to send the money to a that bank account???No worries I think,cause the money is just from overseas and is not that much that would make them coider where the money comes from anyway,also in Uk I asume....so what is the problem,or I got it totally wrong...

[niggle]

There are some limitaions in monetary gifts which, I believe fall within the realms of inheritance tax and a clause known as 'The 7 Year Rule'. I cannot remember exact amounts but I think that 10K is ok. Either way, transfer the money in 2 amounts if necessary - 1 amount before 1st April. Info is available at www.direct.gov.uk/en/index.htm

[londonthai]

she can tak cash from the bank and hand it over to you.

take it to thailand in £50 notes (there is £10k limit to take with you abroad - if found by the security check in the airport they will try to confiscate it if you don't give a reliable explanation) or safer in travellers cheques.

try to avoid bank transfers as they can be traced even many years back and you might have to pay tax or even get them confiscated

[slippery when wet]

sorry should have clarified.

Both my self and my mum live in in the uk and there fore are subject to UK taxation regulations.

Lived in Thailand before and intend to return shortly but in the meantime.............we all love the inland revenue!!!!!

[naka]

Inheritance Tax allows life-time 'gifts' - that is, the transfer of money or items from one person to another - to become non-taxable if the person making the gift survives for seven years thereafter.

In addition, annual gifts of up to £3,000 a year in total are also exempt from IHT, as are any number of gifts of up to £250 each. There are also exemptions for where parents make a gift at the time of their child marrying.

(from BBC)

Naka.

[Smilodon]

When Donald Trump wanted to get Lawrence Taylor to play for his then-existent football team he gave him a long-term interest-free loan of about $945,000. She could loan you the money, and you can put it on a long-term payback, of, say 99 years, like the HK lease from mainland China.

Don't know how long that would work with the tax man. But, to quote Ginger from Swordfish, "Just a suggestion. Juust a suggestion."

[slippery when wet]

Thank you all for some very good answers and suggestions.

Definately food for thought.

Thanks a million!!