Receipt of monies from abroad

[joshilo]

This question has been asked before but I couldn't find an exact scenario, hence the post below.

My wife expects to receive anywhere between £100k to £300k from her father from India. We both are UK residents and passport holders.
The reason for the transaction would be linked to a potential property sale linked to her name (we are checking if the property is in her or father's name). If the property is not in her name, both parties are happy to structure it as a one-off gift. The reason for variability in the amount is simply a discretion to be agreed between father and daughter.

Would either scenarios carry any income/CGT/IHT liability? What are the repercussions of structuring this linked to a property sale or one-off gift?

Does she need to file or report anything of this amount coming into her account, e.g. source of funds?

[AGoodman]

If the monies come from a sale of a property that she owns, or has an interest in, she would be liable to capital gains tax on any gain. The gain in value would be calculated on sterling values (using relevant exchange rates) between her acquisition and disposal. If Indian herself, and can claim to be non-UK domiciled, she may be able to elect to be taxed on the remittance basis (so only taxed if the proceeds are brought to the UK) but that could come with a substantial charge for the privilege and she would still pay CGT if the proceeds were ever brought here (which I imagine would be your intent).

If the monies are simply a gift from father (and he is not UK domiciled) then there should not be any UK tax implications. Just ensure that he does not pay the monies to a UK account of his own first. Most advisers (including me) recommend that a gift of this kind be made entirely offshore (ie to a foreign account belonging to your wife) to avoid it being a gift of a UK asset (and therefore at risk of UK IHT on her father's death) but in truth it is generally accepted that a transfer from his Indian account to her UK account would not be a gift of UK situated assets.

There could be a small currency gain or loss for CGT on the exchange rates if she is given rupees and converts them herself to sterling.

There is no need to report the receipt of a gift although it is always possible that the UK receiving bank may ask questions to comply with their anti-money laundering procedures and it may be best to warn them that the monies will be arriving.

What are the repercussions of structuring this linked to a property sale or one-off gift?

Either she has an interest in the property or not so I can't see any planning opportunities here.

AG

[maths]

Foreign currency bank accounts are no longer chargeable assets for CGT. Hence, on a conversion of rupees into sterling no gain or loss arises for CGT purposes.