any implications re £ gift?

[lal123]

Theoretically if my Mum was to gift me £20,000, would there be any tax implications for me? Do I have to declare it? Do I have to tell bank etc where money has come from? Does it make any difference if £ is a loan or a gift? THanks in advance

The tax implications would be two-fold. Tax would be due on any interest you get from saving the money, for example, unless you used part of it in an ISA. Also, if your mother were to die within seven years of giving you a sum over £3000 then it would be liable for inheritance tax.

For more details on the rules see this government site Taxation

Should have added... You don't have to tell your bank where any money you receive comes from.

Thanks Chil - If in a couple of years my Mum was to start claiming any benefits would the fact that she had gifted me this money affect her eligibility?

THanks for hte link by the way - don't think inheritance tax would apply as her estate wouldn't be that big

£350,000 is not as big a sum as it used to be. If someone has a house, a few savings, a bit of life insurance etc. then they can hit £350k quicker than they think.

It shouldn't affect your Mother's eligibility for benefits. If she chose to give you £20k, buy a car with it or take a world cruise I can't see how the taxman would make the distinction unless she actually told them - and my personal view on that is 'if they don't ask the question, don't volunteer the information'. Might be different if she was a millionaire, salting away serious amounts of money with relatives as a tax dodge. Even then, they'd only get suspicious if the total tax paid plummetted.

thanks - reassures me a bit about actually accepting the money. She doesn't own her own house, doesn't have a huge amount of savings etc. Now just to decide where to put it!

If you're not using the money straight away then take advantage of your tax-free saving allowances first i.e. Cash ISAs (£5100 limit in 10/11 tax year). And there are plenty of useful sites with advice like Money Saving Expert to help you decide what to do with the rest.

Should have prefaced the above by saying that, with savings interest rates being apallingly low at the moment, it makes financial sense to pay off any higher-interest-attracting debts (mortgages, CC, loans) even before you go for the tax-free savings.