Giving money to a family member - What tax?
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shelley
Apprentice
Joined: 04 Apr 2008
Posts: 7
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 Posted: 08/18/09 - 08:01 Post subject: |
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| My brother has got himself into some financial trouble and I have decided to help him out and give him some money towards the paying off of his credit card debts. £5,000 is in fact the figure I want to give him. I was just about to deposit this into his bank account when a friend of mine mentioned that my brother would have to pay tax on this!!! I can't believe it!!! Is this really true!? |
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tito
Apprentice
Joined: 05 Apr 2007
Posts: 4
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| Posted: 09/10/09 - 01:33 Post subject: |
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| Yes. Sad, but true. We are allowed to receive up to £3000 each tax year in gifts from friends and family. After that the gifts are taxed normally as income tax. I think that this is not really fair, but there you go. I am not saying that I want to encourage your brother to evade taxes, of course, but one way round this would be you withdrawing the money in cash in giving it to him. Proving his obligation to pay tax on the money he uses to pay off his credit card debts will be like looking for a needle in a haystack - basically, while it is not really legal, you will not get into trouble, either. |
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