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Post Info TOPIC: Self employed. Can a gift of money be taxable?
AICB


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Self employed. Can a gift of money be taxable?
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Hi all,

A Merry Xmas had by all, I trust, and looking forward to a happy New Year.

A question on personal tax please. A self-employed guy had a gift of money from an in-law family member. Part of this was to help get a business going, to provide an  income for him and his wife. 

Could he be taxed on this income (more than £20,000) on his self-assessment form? (I presume that it would not be taxed if it was a formal loan with a repayment plan).

Andy



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Andrew
Robert Pearce


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If it's a gift from a family member, then it won't be treated as taxable income.  If the in-law were to die within seven years of making the gift, there may be inheritance tax implications.

It would be a good idea for the in-law to write a letter to the recipient, confirming that on such-and-such a date they gifted £x to them.  This can then be used as evidence should HM Revenue & Customs ever enquire into the self employed guy's affairs and query the source of his funds.



-- Edited by Robert Pearce on Thursday 29th of December 2011 05:58:57 PM

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Pearce & Co - Chartered Accountant and Chartered Tax Adviser 

www.pearceandcoaccountants.co.uk

These comments are outline only and are not a substitute for specific professional advice.
AICB


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Thank you Robert.

Andy



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Andrew
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