When does giving a gift “count” for tax year?
Generally it goes by when they receive the check, not when they cash the check. Though if the check was received prior to midnight on December 31st, but after the bank closes, they would probably let the tax payer decide to count it for the next year. Of course if the check is from person A to person B then the only issue is gift tax, or annual limit calculations.  If it is company to person then income tax could be involved.  The IRS calls this Constructive receipt Income   Under the cash method, include in your gross income all items of   income you actually or constructively receive during your tax year. If   you receive property or services, you must include their fair market   value in income. Example.   On December 30, 2011, Mrs. Sycamore sent you a check for interior   decorating services you provided to her. You received the check on   January 2, 2012. You must include the amount of the check in income   for 2012.  Constructive receipt.   You have constructive receipt of   income when an amount is credited to your account or made available to   you without restriction. You do not need to have possession of it. If   you authorize someone to be your agent and receive income for you, you   are treated as having received it when your agent received it. Example.    Interest is credited to your bank account in December 2012. You do not   withdraw it or enter it into your passbook until 2013. You must   include it in your gross income for 2012.  Delaying receipt of income.    You cannot hold checks or postpone taking possession of similar   property from one tax year to another to avoid paying tax on the   income. You must report the income in the year the property is   received or made available to you without restriction. Example.   Frances Jones, a service contractor, was entitled to receive a $10,000   payment on a contract in December 2012. She was told in December that   her payment was available. At her request, she was not paid until   January 2013. She must include this payment in her 2012 income because   it was constructively received in 2012.  Checks.   Receipt of a valid   check by the end of the tax year is constructive receipt of income in   that year, even if you cannot cash or deposit the check until the   following year. Example. Dr. Redd received a check for $500 on December 31, 2012, from a   patient. She could not deposit the check in her business account until   January 2, 2013. She must include this fee in her income for 2012. In general it is best not to cut it close. If the check is to be counted as an January event it is best to send it in January. If it is to be December event it is best to send it early enough to be able to say with confidence that the check arrived at the destination before the end of the year. "Based on past case law, a check made payable to qualified charity and delivered (e.g., placed in the mail on 12/31 would count as delivered as it is out of the hands of the donor) would fall under the ""constructive receipt doctrine"". However, for non-charitable gifts (e.g., gifts to family members) it is the date the check is cashed (honored by the receiving bank).  This is important as the annual gift exclusion is just that ""Annual"".  Therefore, if I gift my child $14,000 by writing a check on 12/31/2014 but they deposit it on 1/3/2015 then I have used my annual gift exclusion for 2015 and not 2014.  This means I could not gift them anything further in 2015. BTW the annual gift amount is for ALL gifts cash and non-cash.  Most people don't seem to realize this.  If I give $14,000 of cash to my child and then also give them Christmas gifts with a value of $1,000 I have exceeded my annual gift exclusion to that child.  Usually there are ways around this issue as I can give $14,000 to each and every person I want and if married my spouse can do the same.  This allows us to give $14,000 from each of us to each child plus $14,000 from each of us to their spouse if married and $14,000 from each of us to each of their children if they have any."
I think  the cleanest way to do this is to rent the house from your father for 2 years, possibly adding an option to buy at a set price to the lease agreement.  That takes care of any gift issues, and avoids complications like you living in a house that you couldn't afford to own otherwise.  If/when you are able to afford a mortgage, get a mortgage on the house and buy it from your father.   Will a bank be willing to take out a mortgage on a house that I technically own for the full amount? I would not take out a mortgage for anything more than 80% of the house's market value.  Anything more than that, and you need to pay mortgage insurance, which will increase your monthly payment for no benefit to you.   My biggest concern is that you won't be able to afford an 80% mortgage after 2 years.  If your father really wants to keep the house in the family then he should either keep the house and rent it to you, or give you the down payment as a gift (keeping under the maximum gift to avoid taxes). If neither you or your father cannot afford the house you may have no choice but to sell it.  I would not advise you make a bad financial decision purely for sentimental reasons. Now i want to get this money in my new UK bank account, does this mean that gov will take taxes from this money as well. Yes that is income and you have to pay tax on that. But it might be a bit complicated than that, so I would ask you to call up HMRC or visit an accountant or maybe ask the finance people of your employer. Also one of my family members send us money every few months and will send to this bank from now on, does taxes also apply on this? See the HMRC page about capital gains tax on gifts: You won't have to pay Capital Gains Tax when you give a gift to your   husband, wife or civil partner - as long as both of the following   apply: It's useful to keep a note of what the asset cost you. Your spouse or   civil partner may need this to work out their Capital Gains Tax when   they dispose of the asset. Example: Mr B lives with his wife and gives her an antique table that   he bought for £12,000 in 2003. Mrs B spends £500 restoring the table,   eventually selling it for £20,000.  Her total costs are £12,500 (£500 plus Mr B's original cost £12,000). Mrs B's   gain is £7,500 (£20,000 less £12,500). When you make a gift to a family member or other person you're   connected with, you'll need to work out the gain or loss. This doesn't   apply to gifts you make to your spouse or civil partner. This also applies if you dispose of an asset to them in any other way   - for example, you sell it to them for a low price. A 'connected person' in this context is someone such as your brother,   sister, child, parent, grandparent, mother-in-law or business partner.   Follow the link below for more information about connected people and   Capital Gains Tax. You must get a valuation of the asset at the time you made the gift.   Use this value in place of any amount you received for the asset to   work out your gain or loss. If you gave the asset away, then of course   the amount you received for it will be nothing. If you make a loss you can only deduct the loss from gains you make on   gifts or other disposals to the same person. "From the IRS' website:  How many annual exclusions are available? The annual exclusion applies to gifts to each donee. In other words,   if you give each of your children $11,000 in 2002-2005, $12,000 in   2006-2008, $13,000 in 2009-2012 and $14,000 on or after January 1,   2013, the annual exclusion applies to each gift. The annual exclusion   for 2014, 2015, and 2016 is $14,000. What if my spouse and I want to give away property that we own together? You are each entitled to the annual exclusion amount on the gift.   Together, you can give $22,000 to each donee (2002-2005) or $24,000   (2006-2008), $26,000 (2009-2012) and $28,000 on or after January 1,   2013 (including 2014, 2015, and 2016). https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes Basically, this means that it doesn't matter which person it specifically comes from as it's a ""joint"" gift.  There is more complicated paperwork to fill out if the gift comes from a single check and needs to be ""split"" for taxes. Each parent would need to fill out a separate gift tax return form, essentially proving that both parents approve of the gift. It seems like it's easier if each parent writes a separate check, however it's not a requirement." If you keep the account in your name only and your girlfriend is depositing money into it, then she is in effect making gifts of money to you. If the total amount of such gifts exceeds $14K in 2014, she will need to file a gift tax return (IRS Form 709, due April 15 of the following year, but not included with her Federal tax return; it has to be sent to a specific IRS office as detailed in the Instructions for Form 709). She would need to pay gift tax (as computed on Form 709) unless she opts to have the excess over $14K count towards her Federal lifetime combined gift and estate tax exclusion  of $5M+ and so no gift tax is due.  Most estates in the US are far smaller than $5 million and pay no Federal estate tax at all and for most people, the reduction of the lifetime combined... is of no consequence.  Another point (for your girlfriend to think about): if you two should break up and go your separate ways at a later time, you are under no obligation to return  her money to her, and if you do choose to do so, you will need to file a gift tax return at that time. If you will be returning her contributions together with  all the earnings attributable to her contributions, then keep  in mind that you will have paid income taxes on those earnings all along since the account is in your name only.  Finally, keep in mind that the I in IRA stands for Individual and your girlfriend is not entitled to put her contributions into your IRA account. Summary: don't do this (or open a joint account as tenants in common) no matter how much you love each other. She should open accounts in her name only and make contributions to those accounts. At least on 25K. Here's the actual IRS publication, it's fairly complex and the limits depend on the types of organization you're donating to, and the types of property you're donating. Some donations may be limited to the maximum of 20% of your AGI. Bottom line - the maximum you can deduct in almost all circumstances would be 50% of the AGI (very few exceptions allow deducting up to 100% of your AGI). Worth mentioning that whatever you cannot deduct this year - you can roll over to the next year. do I have to pay any tax? Technically this would be treated as Gift from non relatives and taxes as per gift tax rules. There is a limit of Rs 50,000 per year to receive funds from non-relatives. Note if the amount becomes Rs 50,001 then the entire Rs 50,001 is taxable.  If you are again giving this money to your friend, then your friend is also liable to pay Gift Tax on the money received. It is best recommended that you have your friend open an account. A gift between spouses has no tax implications.  If one spouse dies the inheritance tax is always zero no matter how much of the estate passes to the surviving spouse. Gift taxes are actually related to estate taxes, so a gift no matter how large never requires filing any tax forms or paying any taxes. (a) you give away your money - gift tax The person who receives the gift doesn't owe any tax.  If you give it out in small amounts, there will be no gift tax. It could have tax and Estate issues for you depending on the size of the gift, the timing, and how much you give away in total.  Of course if you give it away to a charity you could deduct the gift. (b) you loan someone some money - tax free?? It there is a loan, and and you collect interest; you will have to declare that interest as income. The IRS will expect that you charge a reasonable rate, otherwise the interest could be considered a gift. Not sure what a reasonable rate is with savings account earning 0.1% per year. (c) you pay back the debt you owe - tax free ?? tax deductible ?? The borrower can't deduct the interest they pay, unless it is a mortgage on the main home, or a business loan. I will admit that there may be a few other narrow categories of loans that would make it deductible for the borrower. If the loan/gift is for the down payment on a house, the lender for the rest of the mortgage will want to make sure that the gift/loan nature is correctly documented. The need to fully understand the obligations of the homeowner. If it is a loan between family members the IRS may want to see the paperwork surrounding a loan, to make sure it isn't really a gift. They don't look kindly on loans that are never paid back and no interest collected.