I have been trying to find information regarding cash gifts(none charity)
I'm a sole trader and want to help my sister with money as she can't find a job.
Does the gift come with tax benefits? So If I gave my sister £1,000 would this be taken from my tax bill ?
Replies (9)
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Giving/Paying
"Giving" £1000 to your sister will have no tax consequences for either of you, but if she was to do some work for you for which she could justifiably charge a fee, it could be included in your business accounts. However that would also turn it into potentially taxable income (to be declared to HMRC) for her - not a problem if she has no other income in the year, but if she was to find a new job, she could have a tax bill at the year end.
DWP
And if it is earnings for work done and she is claiming benefits she would have to declare it to the DWP
No
There are always implications!!
For your sister a gift of cash is received tax free.
You position will not be affected from an income tax point of view but, depending on what else happens in the year, there could be inheritance tax implications.
It should be mentioned ...
... there is a annual gift exemption of £3000 in total each tax year which can be given with no Inheritance Tax implications, and unused allowances can be carried forward one year so potentially you can gift up to £6000 to her.