Given money for a house deposit - Impications?
Discussion
Hi all, i am after a bit of advise regarding house deposits. my partner and I are getting married in a month and when we have finished paying for the wedding and honeymoon will will begin saving for a deposit hopefully around september pay time.
We don't earn massive sums but have decent jobs and we are hoping to save around £400 pcm towards a deposit while still maintaining our current lifestyle/outgoings. Now here is the question. My grandparents have offered to give us approx £10k towards a deposit when we feel we are ready, what implications could this have as regards tax etc as we would be recieving a monitary gift? i have no idea and was hoping that the great minds at PH could shed some light here for me.
Cheers all
Matt
We don't earn massive sums but have decent jobs and we are hoping to save around £400 pcm towards a deposit while still maintaining our current lifestyle/outgoings. Now here is the question. My grandparents have offered to give us approx £10k towards a deposit when we feel we are ready, what implications could this have as regards tax etc as we would be recieving a monitary gift? i have no idea and was hoping that the great minds at PH could shed some light here for me.
Cheers all
Matt
It shouldn't have any tax implications but if they die within 7 years of making the gift then it might be considered to be part of their estate and so there could be inheritance tax implications. But, if I'm correct, there is a 3k per year exemption per person. So I think that each of your grandparents could give each of you 3k each a year without any IHT risk so in theory up to 12k. Someone who knows the exact details will doubtless be around soon.
Pretty much correct. They can each give £3,000 for tax year 2012/13 and, if they didn't give £3,000 each in 2011/12, they can add that to this year's amount making £12,000 in total.
No need to worry about dying within seven years.
Of course, the £3,000 limit is THEIR limit, not yours. So if they do give £10,000 to you for a deposit, they only have £2,000 left over to give to anyone else before 5 April 2013.
Obviously, for 2013/14, they will have another £3,000 each to give away, if they want to.
No need to worry about dying within seven years.
Of course, the £3,000 limit is THEIR limit, not yours. So if they do give £10,000 to you for a deposit, they only have £2,000 left over to give to anyone else before 5 April 2013.
Obviously, for 2013/14, they will have another £3,000 each to give away, if they want to.
Eric Mc said:
Pretty much correct. They can each give £3,000 for tax year 2012/13 and, if they didn't give £3,000 each in 2011/12, they can add that to this year's amount making £12,000 in total.
No need to worry about dying within seven years.
Of course, the £3,000 limit is THEIR limit, not yours. So if they do give £10,000 to you for a deposit, they only have £2,000 left over to give to anyone else before 5 April 2013.
Obviously, for 2013/14, they will have another £3,000 each to give away, if they want to.
Cheers, that puts my mind at rest a little more, I didn't want them to be doing anything that they could regret/hurt them financially at any point as its such a generous offer.No need to worry about dying within seven years.
Of course, the £3,000 limit is THEIR limit, not yours. So if they do give £10,000 to you for a deposit, they only have £2,000 left over to give to anyone else before 5 April 2013.
Obviously, for 2013/14, they will have another £3,000 each to give away, if they want to.
Thanks
Just a heads up if you can even call this that. This is pub talk so I don't have details and it may be rubbish but a friend told me he had trouble with getting a mortgage as the deposit was gifted. It can't be true in all cases as I know at least my sister had no trouble but as it would be very easy to call it savings rather then a gift i thought I'd mention it
Just a heads up if you can even call this that. This is pub talk so I don't have details and it may be rubbish but a friend told me he had trouble with getting a mortgage as the deposit was gifted. It can't be true in all cases as I know at least my sister had no trouble but as it would be very easy to call it savings rather then a gift i thought I'd mention it
robnokia said:
Just a heads up if you can even call this that. This is pub talk so I don't have details and it may be rubbish but a friend told me he had trouble with getting a mortgage as the deposit was gifted. It can't be true in all cases as I know at least my sister had no trouble but as it would be very easy to call it savings rather then a gift i thought I'd mention it
Gifted deposit is not a problem if the gift is from immediate family (parents, grandparents or siblings). They will have to sign a letter to say that deposit is a gift, that they will hold no charge over the property and that they do not require it paying back (eg it's not a loan).And don't say it is just savings (apart from being mortgage fraud) as they will ask for historic bank statements to prove an accumulation of funds.
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