Tax Q: Giving larger amounts of money to friends
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arne
Apprentice
Joined: 18 Jan 2006
Posts: 2
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 Posted: 01/22/08 - 10:32 Post subject: |
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| Hi. A friend of mine who has really helped me out big time in the past has now hit hard waters and I would like to help him out. That is, I have decided to give him a gift of a larger amount of money (£5,000). I would just withdraw it from my savings account and hand the sum over in cash. Does this have any tax implications? Please advise. |
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merla
Apprentice
Joined: 02 Mar 2007
Posts: 3
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| Posted: 02/20/08 - 22:08 Post subject: |
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| Yes. Any individual is allowed to receive up to £3000 in cash gifts per tax year. That is a total amount, meaning that if your mate would receive, let's say, £3000 from Fred and then another £1000 from you, he'd be taxed on your gift as the threshold will have already been passed, as he'd reached the limit with Fred's gift. The amount you mention is in itself already larger. He will have to declare this on his tax return, and pay income tax on it like on any other income. |
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