Gift from Mum

[quizgirl]

Wonder if anyone can help. My mother has recently sold her house and has come to live with me and my family. She wants to give us some of the proceeds from the sale to us to help pay off some of our mortgage.

I was wondering if there are any tax rules we should take into account.

Thanks

[factor-fiction]

No, although there may be inheritance tax implications in certain circumstances if she were to die in the next seven (I think) years. It depends on the amounts, though- some are exempt. Roughly how much are you talking about? There may also be implications if she needs care home costs in the future

[quizgirl]

Thanks factor30

We're talking around £30,000

[emeritus]

There is some useful information here from HMRC

http://www.hmrc.gov.u...erty/exempt-gifts.htm

[boxtops]

You do need to be careful about the gift - if she needed nursing home care in future life, she'd have to be sure that the taxman couldn't see these gifts as a way of reducing her capital so she didn't have to pay NH fees. I;d seek legal advice if I were you.

[annie0000]

...could you maybe count it as rent?

[redcrx]

i think your mum should get some advice, perhaps she could buy a share of the property, for her to then pass to youwhen she dies.

After all, if she gives you all her money now and you had a disagreement down the line she could find herself homeless and penniless.

[annie0000]

This is the relevant bit form the HMRC link:

Selling your home and giving the money to your children
If you sell your home and give the money to your children, the gift won't be included in your estate for Inheritance Tax purposes, provided you live for seven years after you make the gift.
However, if you sell your home, give the money to your children and then move into their home - whether this is into a granny annex they've made for you with the money or a room in a house they have purchased - there could be Income Tax implications. You may be classed as living in a pre-owned asset if you don't pay the market rent.
If both you and your children sell your homes, pool your money and buy a new home as joint owners to live in together, the part belonging to you will be considered part of your estate for Inheritance Tax purposes.
If you don't make equal contributions to the purchase, or don't occupy the same share of the property as you purchased, you may have to pay Income Tax as your share may be classed as a pre-owned asset. See the link below for more details about pre-owned assets.

[quizgirl]

Thanks Annie0000

That seems like the relevant rule . Do you have a link to it.

[annie0000]

sorry quizgirl - been away from pc - I got to it through emeritus's link:

this is the page here:

http://www.hmrc.gov.u...ome-to-children.htm#2