Gifting money to daughter to buy property

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This topic contains 1 reply, has 2 voices, and was last updated by  Mark Stücklin 1 year, 6 months ago.

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  • #193131

    Andrew Morgan
    Participant

    My daughter live and works in Mallorca. She has lived and worked there for six years and has a permanent contract as a school teacher. She would like to buy a house on the island. In order to assist her with the purchase I would like to gift he the sum of approximately £60,000. Will she be liable to be taxed on that gift and are there any formalities that I need to address

  • #193138

    Mark Stücklin
    Keymaster

    Yes, she would be taxed. I don’t know what the rate is in the Balearics, but should be easy to find out. I think it’s around 7% in Catalonia, so I imagine something similar. Another option is you loan her the money interest free or very low interest, long term, say 10 years. The problem there is that when you pass away, depending on the value of your estate, that same £60,000 would be taxed at 40% death duties, so if you are worth more than £325,000 or £650,000 in the case of a couple (I’m not exactly sure of the figures) the tax if you gift now in Spain could be much lower than if she inherits after you go (assuming you live another seven years, which of course I hope you do). It’s complicated. You’ll have to consult a fiscal lawyer.

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