Tax implications for cash gift from Rep. Of Ireland domiciled parent to child living in UK

[squeeze]

My Rep. Of Ireland domiciled mother wants to give a €40,000 gift to each of her children. She wants to lodge this to our Irish bank accounts. I am working in the UK and paying PAYE to the Inland Revenue but am also 'Ordinarily Resident' for tax purposes in Ireland as I have only been here a little over a year. There are no tax implications in Ireland as the gift falls below the €466,725 threshold applicable.

Does anybody know what the tax implications would be given the fact that I am working in the UK?

[Huw Williams]

I think there is a fundamental difference between the UK and Eire inheritance tax systems.

In essence the UK system only taxes gifts by UK domiciled people (or of UK based assets) in some circumstances:

they are not made to an individual; or
they were made less than 7 years before death

Gifts to individuals made more than 7 years before the death of the donor are not taxed. If your mother is not UK domiciled she is outside the inheritance tax net anyway and money held outside the UK is also outside of the net.

Even if the gift is taxable there are exemptions available.

So I think the answer to your question is that there is nothing to worry about.

However you may become UK domiciled if you stay here at which point you may want to plan to minimise the IHT bill when you come to die..

Huw Williams
Nottingham

0115 914 6846

enquiries@huwwilliams.co.uk