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Giving £15k cash - are there tax implications for recipient? Advice please.

(10 Posts)
havingastress Wed 13-Feb-13 21:44:00

Thank you for the replies smile

No, not planning on dying any time soon hopefully!

I don't have any paperwork to prove it's his money in the first place unfortunately. He's helped me out so much in the past. It's me who's kept a running total. I actually owe him £11, 325 but want to give him £15k in a lump sum by way of thank you (and let's be honest, much cheaper than if I'd taken out a loan!)

We don't claim benefits (well, only child benefit!) so I'm guessing that doesn't apply either.

MrAnchovy Wed 13-Feb-13 18:07:41

How is that relevant (even if true)? The OP is not being sued, they are repaying the debt willingly.

CogitoErgoSometimes Wed 13-Feb-13 16:58:37

Lend someone money under without documentation, a promise to repay or other supporting evidence and try suing to get it back again. You won't get very far.

MrAnchovy Wed 13-Feb-13 15:58:17

"If it's an informal, undocumented debt it's essentially a cash gift."

No its not. Repayment of a debt is repayment of a debt. But there are no income tax implications of either a gift or repayment of a debt anyway.

RichManPoorManBeggarmanThief Wed 13-Feb-13 14:17:31

You can give away as much as you like. Its not classed ad earnings for the recipient so not taxable as income for him. The only problem comes if you die within 7 years and have an estate of more than £375k when it could be subject to inheritance tax.

LadyKooKoo Wed 13-Feb-13 14:10:27

Are these documented loans as my understanding is that you cannot give away more than £3000 per year? Contact HMRC for clarification.

CogitoErgoSometimes Wed 13-Feb-13 13:55:16

If it's an informal, undocumented debt it's essentially a cash gift.

DorisIsWaiting Wed 13-Feb-13 13:44:09

This isn't really a cash gift though is it if you are clearing a debt?

It's his money in the first place which you've borrowed.

CogitoErgoSometimes Wed 13-Feb-13 13:37:27

No tax implications on cash gifts either for the donor or the recipient. One exception is in the case of inheritance tax.... but if you're not planning to die any time soon and/or the value of your estate is under the IHT threshold, that doesn't really apply. Another exception would be if you claim benefits that are means-related. Giving away a substantial amount of money can be classed as 'deprivation of capital'.

havingastress Wed 13-Feb-13 11:42:15

That's it really.

I owe quite a bit of money to a family friend.

When I sell my house, I'm in a position to pay it back in one lump sum.

However, I should like to know, are they any tax implications for him if I give him £15k all in one go? Does he have to declare it? Do I? It's for various loans gived over the last few years whilst we've had money troubles.

Can anyone advise? Thanks.

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