Unlocking the Legal Jargon: How AI Legalese Decoder Can Help You Navigate Inheritance Issues When Parents Sell House and Want to Gift You $20k
- April 10, 2024
- Posted by: legaleseblogger
- Category: Related News
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## My Parents’ Generous Gift: How to Safely Handle 20k in Cash
My parents have recently sold their house and want to gift me and my other siblings 20k each. They are planning to give us the money in cash, but I have concerns about the safety of having such a large sum of money on hand.
### Concerns about Handling Cash Gifts
I am worried about how to safely transfer the cash into my bank account. Will the bank flag it as potential money laundering if my parents simply transfer the money to me? Additionally, I am unsure about the tax implications of receiving such a large gift. Does the fact that it is a gift affect whether or not we need to pay taxes on it? How do our salaries come into play in this situation?
### Using AI Legalese Decoder for Guidance
In this situation, the AI Legalese Decoder can be a valuable resource. The AI Legalese Decoder can help clarify the legal implications of receiving a cash gift from family members. It can provide guidance on how to safely handle the transfer of funds into your bank account and advise on any tax obligations that may arise from receiving a gift of this nature. Additionally, the AI Legalese Decoder can offer insights on how to navigate any potential legal issues that may arise from receiving a cash gift, ensuring that you handle the situation in a legally sound manner.
### Seeking Expert Advice and Taking Precautions
Ultimately, it is always advisable to seek expert advice when dealing with legal and financial matters. In this case, consulting with a legal or financial professional can provide you with the guidance you need to ensure that you handle the situation appropriately. Taking precautions, such as getting a gift letter and putting the money into a savings ISA, can also help safeguard your finances and ensure that you comply with any legal requirements related to receiving a cash gift.
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****** just grabbed a
You don’t need to pay tax on gifts (unless they die within a few years of the gift, I think 7?). There shouldn’t be any issue them just transferring you the money, my parents did the same thing for a similar amount and there were no problems. Salary has no effect on any of this AFAIK.
If they are selling the house, then the money is easily traced to that source. So it’s better to transfer it. If its cash in notes, you will need to prove where the money comes from.
Not much more to add than others have commented, but just because you queried it specifically… the only impact your income has on savings, is usually to do with the tax you’d have to pay on the interest gained.
eg. £20,000 saved at 5% interest, will produce around £1,000 per year.
If you are a basic rate tax payer (ie. usually with income below £50K PA in England and Wales), then you have a £1,000 per year interest tax free allowance. If you are a higher rate payer, then your tax free allowance on interest is £500. You’d then pay 40% tax on the remaining interest gained.
I think if you’re a top rate tax payer (>£125K PA), you have zero tax free allowance but not 100% sure. I’m in the higher rate category myself, but not the top.
Cash like physical notes? Why do they want to do this?
Just transfer it. If it’s a legitimate transaction it won’t be flagged. If your parents are actually money laundering then they will be caught regardless.
Just do it by a bank transfer?
No other concerns as long as they don’t die within 7 years with an estate and failed transfers exceeding the inheritance tax limit.
You wouldn’t pay tax on it unless your parents die within 7 years.
If your parents gave you it as cash (I’m imagining a suitcase filled with £20 notes) you could go and pay it in to the bank as soon as they give it to you – that’s probably the safest way of doing it. (Bank transfer would be easier/safer but if your parents insist on cash…).
They’d ask where you got the money but as long as you told them your parents had sold their house and gifted you the money, they’d accept that. Obviously don’t try and lie because that’s never going to go well.
If I were you I’d would put it into an ISA. Then you wouldn’t pay tax on the interest gained.
No, no and no.
It’s not money laundering.
By transferring direct bank to bank there is traceability.
If the bank feels the need to check.
If you turned up with a wedge of cash … then questions are likely to be asked 🤪
Why are you expecting them to hand you all a bundle of cash? That would seem wholly bizzare
You say thank you to your parents, and ask them to do a bank transfer if they don’t mind.
The rest, it’s a gift. You can receive gifts with no issue whatsoever. If your parents survive for seven years after giving this money, there’s no tax liability. Doesn’t impact your salary or income or anything.
Unlikely to pay tax even if they die within 7 years. Your parents combined would have just under £500k tax free limit on inheritance, so unless they have substantially more than £500k then I wouldn’t worry about it.
20k isn’t all that much in today’s terms ( it’s a lot but not life changing money for you to be so worried)
Check but I doubt you’d owe any tax, best thing you do is stick it in a stocks and shares isa or a LISA.
Just wondering though … how old are you parents … are they now renting … could this be viewed as deprivation of assets ?
Ask them to write a letter stating that it is a gift!
Put in in the bank, and keep them alive for 7 years.
Your need the money trail, if you ever plan on buying a house and using the money for a deposit.
Only point I would add would be to get a brief letter from them declaring it as a gift – useful if you need to put it towards any sort of purchase in the future where fraud checks will be required – such as buying a house.
They should ask their bank to do a CHAPS transfer. There (may) will be some fees, but it’s documented (paper trail from house sale to your account) and your bank won’t look twice at an incoming CHAPS payment.
Alternatively, they can do multiple BACS payments (no fees!), but it might get flagged (probably won’t, I’ve done this several times, but the possibility exists).
Don’t use cash. Do not under any circumstances use a pile of paper cash. That’ll look so dodgy and when you deposit the cash in your account your bank *will* flag it as potential money laundering and you’ll need a butt load of paper work to prove it’s not.
If you use cash, prepare to spend a very long time adding it to your account in small amounts …
Easy enough, gift. Transfer it in smaller chunks if they don’t want to draw attention. My parents did this years ago. Seem to be dumb to be leaving every thing as inheritance then get taxed on it. I’d be gifting away
Put it all into a tax free cash ISA we get 20k per year where all gains are tax free – vanguard world fund is probably your best bet
You’ll be fine with the gift, cash or otherwise just let your bank know. This is peanuts in the big scheme of things.
Love it how the UK is so screwed that people think 20k is a lot of money 😅