Sale of house profit gifted to child
1) You parents will have to pay tax on the gain as it wasn't their primary home.  You don’t pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply: As I look at it, it is your parents are the ones who own the property and they will have to pay on £60000. But as you say you pay part of the mortgage, I would go to a tax advisor/accountant to confirm if they will only pay on the £15000. I couldn't find any guidance on that matter on gov.uk 2) Inheritance tax will not be levied on it as it is below £325000, but tax will be levied on £325000, less £3000 annual gift allowance. Two articles for further information -  GOV.UK's Tax when you sell your home   Money.co.UK's Gifting money to your children: FAQs
The request for your parent's income comes from Form 8615, Tax for Certain Children Who Have Unearned Income.  I typically see this form appear as I'm doing my daughter's taxes and start to enter data from stock transactions. In other words, your earned income is your's. But if you are a dependent, or 'can be,' the flow avoids the potentially lucrative results from gifting children appreciated stock, and have them take the gain at their lower, potentially zero cap gain rate. I suggest you grab a coffee and thumb through Pub 929 Tax Rules for Children and Dependents to understand this better.  From page 14 of the linked doc - Parent's return information not available. If a child   can’t get the required information about his or her parent's   tax return, the child (or the child's legal representative)   can request the necessary information from the Internal   Revenue Service (IRS). How to request. After the end of the tax year, send a   signed, written request for the information to the Internal   Revenue Service Center where the parent's return will be   filed. (The IRS can’t process a request received before   the end of the tax year.) It also suggests that you file for an extension for the due date of your return. Include payment for the tax you expect to pay, say by plugging in $200K for parent income as an estimate.  My parents' accountant tells them I do not need it. Well, a piece of software told you that you do, and 3 people on line who collectively qualify as experts documented why. (Note, I am not full of myself. This board operates via the wisdom of crowds. Members DStanley, and Ben Miller, commented and edited to help me form a well documented response that would be tough to argue against.) One of the links showed: Specifically, for 2013, your child can contribute the lesser of: her earned income for the year or $5,500. This is correct. And while I have no issue with fool.com in general, I am a strong believer that when one cites numbers like this, the article should also state the year involved. As I quoted above.  Littleadv's answer was pretty comprehensive. All I'd add is that for a child who is likely in the zero bracket for earned income, the Roth is preferable.  Last, not to nit-pick, but the deposit does not need to be their money. My daughter earned $2300 in 2012, her $2000 Roth deposit can be from my gift to her. Or from any source. No paper trail as to the source of income is required, only that the income exist.  On re-reading I see I left out - the deposits can be spread over as many accounts as you wish, and the total is for IRA/Roth IRA total. It's silly to take small sums and create multiple accounts. Until the value is above a certain level, just find the one broker who can cover what you want to invest in. You should talk to a lawyer. One solution I can think of is using a trust. Keep in mind that that may complicate things (non-revocable trusts are taxed on income not distributed, and revocable trust means you effectively keep the owenership of the stock). If you don't mind paying taxes on the dividends and keep the stocks in a living trust - that would be, IMHO, the simplest solution. That would, however, invoke the gift/estate tax at the value of the stock when the ownership actually passes to the intended receipient (i.e.: you die/gift the stock to the child). It would be very hard to pay the gift tax now and avoid getting the childs SSN and opening an account for the child with it. They're probably talking about flipping houses. The conventional wisdom when flipping is to purchase the property with a mortgage or other loan on day-0. Do the work to rehabilitate it. Get it listed for re-sale promptly (this step has varying strategies) with a profitable price but one that will make it move. Have the house sold on or before the first payment would be due. This is anywhere from 30 to 60 days. The flipper then never has to make a payment on the mortgage or loan, the costs of rehabilitating the home are recovered promptly (potentially before any loan, credit card payments, or invoices are due), and there is a profit. This also assumes that either a 100% loan or some other mechanism is used to address closing costs and fees. This model fits the premise of the infomercial in that you make money investing in real estate but never have to tie up any of your own money in the process. UGMA and UTMA accounts are in the name of a single child(Your daughter), the funds are not transferrable to another beneficiary. There are strict rules governing UTMA/UGMA accounts. As a custodian, you do not own the assets in the accounts; the minor ultimately owns the asset, however, you can make certain withdrawals from the account to cover expenses for the benefit of the child, such as school fees, tutoring, computer equipment, etc. I'm not sure gifting some of the money to her other siblings will actually benefit your daughter who happens to be the real beneficiary. "If I understand you correctly, your logic goes wrong right at the beginning. It sounds like you think one could avoid the income tax that would otherwise be owed to the US because of earning the money that was sent as a gift. That's not normally true. From the IRS's Gift Tax FAQ: May I deduct gifts on my income tax return? Making a gift or leaving your estate to your heirs does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than gifts that are deductible charitable contributions). So the person who sends $10k to their parents doesn't pay any less income tax than if they had kept the $10k in the US, or had just send the $10k overseas directly to their own bank account. Gifting and re-gifting didn't accomplish anything from the point of view of IRS taxes. You may have been confused by the ""annual exclusion"" that's mentioned on that same page. This exclusion is an exclusion for the gift tax. This is a separate tax on gifts, usually paid by the person who gives the gift. If it weren't for the exclusion, one would pay taxes twice on the money sent to their parents: first, when the money is earned, and then again when the gift is given. The exclusion helps avoid this second tax." Generally, a one time thing is considered a gift. For the donor this is obviously not a deductible expense, except for some specific cases (for example promotional gifts under $25 to vendors can be deducted, if you're a business, or charitable contributions to a recognized charity). However, if this is a regular practice - that would not be considered as a gift, but rather as a tax fraud, a criminal offense. Being attentive I would like to make a little gift or give some little   (<100$) amount of money (cash/wire/online) for that Why? Generally, gift is exempt from income if no services were provided and the gift was made in good faith. In the situation you describe this doesn't hold. When the gift is exempt from income to the receiver - the donor pays the tax (in this case, below exemption the tax is zero). If the gift is not exempt from income to the receiver - it is no longer a gift and the receiver is paying income taxes, not the donor. The situation you describe is a classic tax evasion scheme. If someone does it consistently and regularly (as a receiver, donor, or both) - he would likely end up in jail. Is it a gift or a loan? Either way, ask the same lawyer who will do the closing to record a mortgage on the property, your mother holds it.  You are required to pay her market interest, 4% or so should pass IRS scrutiny.  If it's truly a loan, decide on the payoff time and calculate the payments, she'll have a bit of interest income which will be taxable to her, and you might have a write-off if you itemize, which is unlikely.  If it's a gift, since you mentioned gift concerns, she can forgive the interest, and principal each year to total $13K, or file the popular Form 709 to declare the whole gift against her $1M unified lifetime gift exclusion (which negates the whole mortgage/lien thing)