Income Tax On Gifts Uk
March 6th, 2008
Question: I understand that in UK, a child’s income (from gifted shares etc), is added to the father’s income ?
for tax purposes.
I am also told that children have their own tax-free personal allowance. (£5035). How are the two statements reconciled?
Does it mean the father only pays tax for the child’s income if it exceeds the child’s tax-free personal allowance?
I would really be grateful for an expert opinion on this.
Answer: The child does have its own personal allowance which can be used against any income it receives.
BUT, gifts from parents (only) which generate income over £100 will have the income assessed on the parent.
This stops people giving investements to their kids to save tax.
Make the gift from grandparents and it’s OK.
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