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Money Transactions in a Family (General Income Tax Query)

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munish

Assistant

73 Points Posted on 13 July 2021

This query is regarding my friend :-

My friend father given money around 3 Lakh to his son approx 2 years ago for purchasing of new car. The son bought a new car on loan approx. 10 lakhs ( 3 Lakh down payment approx + 7 Lakh loan approx.). Now after around 2 years son sold the same car approx. 6.5 Lakhs. Please note all Loan installments have been finished. Now son wants to transfer money around 6.5 Lakhs to his father saving bank account.

Note :- There is no paper work has been done by my friend family.

My Query :- Q1 :- Is there is any Tax implication on any one in my friend family?

Q2 :- Is there is any documentation is required in this process?

Q3:- If son transfer the money to his father saving bank account , Is there is any tax implication on son or father?

Replies (3)

Quick Summary

This discussion addresses a query about a father gifting his son £30,000 for a car purchase, which the son later sold for £65,000. The son now wishes to return the sale proceeds to his father. The advice provided indicates that gifts between close family members, such as father and son, are generally not taxable in the UK, with no upper limit. While not strictly required, creating a gift deed is recommended for future reference and to document the transaction clearly.

CMA Poornima Madhava

CMA

9106 Points Posted on 13 July 2021

Gift from father to son (or vice versa) is not taxable. You may have gift deeds in support of these transactions.

Balamurali Unnithan MS

STUDENT

1120 Points Posted on 14 July 2021

Sec.56 -Gift from relatives -Fully Exempt -No Limit.

If you have done it through a bank account also, So no offence.

Don't Worry.
Draft a deed -It's better for future reference & proceeds.