Do You Pay Tax on Money Your Parents Give You?

Receiving money from your parents is normally tax-free — there's no UK gift tax on the person receiving it. The only consideration is inheritance tax on the giver's estate, which can apply if they give large sums and die within seven years.

Last reviewed: 30 May 2026 · 2 min read

Key Facts

There's no tax for you to pay on receiving a cash gift
Inheritance tax can apply to the giver's estate in some cases
Gifts are usually exempt if the giver survives seven years

Why receiving a gift is tax-free for you

The UK has no general gift tax for the recipient. If your parents give you money — for a deposit, a car, or just help with rent — you don't pay income tax on it and don't need to declare it. The money is simply yours.

The tax question, if there is one, sits with the giver's estate rather than with you. For everyday gifts and help, there's nothing to worry about at all.

When inheritance tax comes into play

Inheritance tax can apply if someone gives away large sums and then dies within seven years — these are called 'potentially exempt transfers'. If the giver survives seven years, the gift is normally free of inheritance tax entirely.

There are also annual exemptions that let people gift set amounts each year with no inheritance tax implications regardless. For most family help, the sums involved fall well within these exemptions, so it rarely becomes an issue.

FAQ

Frequently Asked Questions

Do I have to declare money my parents give me? +

No. There's no UK tax on receiving a cash gift, and you don't need to declare it to HMRC. The money is yours tax-free. Any tax considerations relate to the giver's estate through inheritance tax rules, not to you as the person receiving it.

Can my parents give me money for a house deposit tax-free? +

Yes, you can receive it tax-free. For inheritance tax, the gift is normally exempt if your parents survive seven years after giving it, and various allowances may cover it anyway. Mortgage lenders will usually ask for a 'gifted deposit' letter confirming it's a gift, not a loan.

Is there a limit on how much my parents can give me? +

There's no limit on what you can receive tax-free. The giver's estate may face inheritance tax on large gifts if they die within seven years, but there are annual gifting allowances that cover smaller regular amounts entirely. For most family situations, no tax arises.

Topics covered

tax gifts inheritance tax

This article is for informational purposes only and does not constitute financial advice. Always do your own research or speak to a qualified financial adviser before making financial decisions.