Readers’ forum: Tax considerations on payments to family member

Bailout

Our daughter requires assistance as she is currently facing some serious financial difficulties. If my husband and I give her an amount of money from our joint savings how is the seven year rule applied for inheritance tax purposes if one of us dies before the seven years have elapsed? Or does any money have to be given by only one nominated person/parent?

Also if we require that our daughter pays us back the money in instalments as a way of teaching her to become more financially responsible once she is back on her feet would we have to declare these repayments on one or both of our tax returns? We intend that the money will ultimately be hers so we are even thinking of perhaps setting up a separate savings account for her to pay into.

What do readers think?

Query 19 941 – Frustrated....