My father is about to sell his business and he wants to give some money to his two children. Any help would be appreciated. I have checked the UK Gov/HM Revenue & Customs websites but I can't get to grips with what you have to pay.
2007-03-19 23:52:11 · 5 answers · asked by Tracy & Russ 1 in Business & Finance ➔ Taxes ➔ United Kingdom
Yes i agree with the 7 years. You have an annual allowance of £3,000 (total not to each person) in each year that will never be taxed (you can also bring last years £3000 forward if it wasn't used) but the remainder will only be subject to inheritance tax if the person dies in 7 years and also if their estate (including gifts within 7 years) are over the total inheritance tax limit (about 285,000 at the moment).
Anyway should all be fine.
No CGT on cash as it is always worth the same (i.e. proceeds-cost=0) and besides that is paid by the sellor (if e.g. it wasn't cash). Your father may have to pay some CGT on selling his business though.
2007-03-20 03:10:55 · answer #1 · answered by tor 4 · 0⤊ 0⤋
There would be zero capital gains tax to pay. There would be no inheritance tax to pay either, unless he was to die within the next 7 years. Even if your dad was to die within the next 7 years, everyone has an inheritance allowance of around 255,000, if his estate is less than this he would not have to pay inheritance tax.
Chilli: I think you are wrong, if you read your wikipedia page, its saying that the first 3000 pounds is tax free so anything after this would be taxed, BUT only if the person was to die before the 7 years were up.
2007-03-20 00:06:35 · answer #2 · answered by MrFinance 3 · 1⤊ 0⤋
Your Parent would have to live a full 7 years after the 'gift' was given to avoid any sort of Tax.. So if the 'gift' was given 21st March 2007, he would have to be still alive on the 22nd March 2014.
2007-03-20 00:07:40 · answer #3 · answered by k 7 · 0⤊ 0⤋
I had a feeling that anything above £3,000 as a gift to family members has to be taxed on as my grandmother gave each of her grandchildren this amount last year. I have just checked wikipedia: http://en.wikipedia.org/wiki/Inheritance_Tax_%28United_Kingdom%29
and this has confirmed it.
2007-03-20 00:13:33 · answer #4 · answered by Chilli1979 1 · 0⤊ 0⤋
why should l pay my Father lnheritance/Capital Gain Tax, Impossile.
2007-03-20 03:57:57 · answer #5 · answered by lebi 1 · 0⤊ 0⤋