Tax liability on gifts to family
Postby derekpeters » Sun Jul 23, 2017 2:08 pm
My father now lives in a care home as a self funder, I have joint power of attorney with my sister to manage his finances. He has income from pension and benefits of £1900 per month after taxes, which is not quite enough to cover all his care fees and other expenses, so his capital of some £230,000 after the sale of his house is dwindling by about £1000 each month. He pays £150 each month into an "executor" account in the names of my sister and me as joint executors of his estate to cover funeral costs, and would now like to make a similar payment to my children, his grand children, to help them with the child care costs they are now facing. Are any of these payments subject to any kind of tax? Does IHT apply tomy father as the donor? Do I need to show the £150 monthly on my annual tax return? Would my daughters need to declare any cash given to them as regular contributions to their living expenses?