Returning a gift

[tax_schmax]

I've been tring to find a refernce that can shine a light on any possibilites for returning a potentially exempt transfer, so that it is deemed to have never taken place? Is there a timescale for such things to be unravelled? Is it absolute in that once transferred it is valid. What if there is bank clearing involved on any cheques being written? I can't find a good source for such details? Can anyone help?

[maths]

Under common law an individual cannot be forced to accept a gift. ONce the gift is accepted it cannot then be "cancelled" as if it had never happened.

However, for the gift not to have occurred the recipient (donee) must not have done anything in connection therewith which could constitute the individual having benefitted from the gift. For example, if ten pounds cash was sent through the post, say from great aunt agatha, and on receipt the donee spent all of it then the whole amount of the gift would have been accepted.

If a client offered you the use of his holiday villa for 7 days without payment of any sort and you arrived there, spent one day there but didn't like it and returned home, the gift would nevertheless have been accepted.

The paying in of a cheque is likely to constitute acceptance of the money proffered by way of the cheque (whether spent or not). But returning the cheque to the sender or tearing it up would not constitute acceptance.

There is no specific time scale with respect to non-acceptance but the longer the time period between receiving the alleged gift and refusing to accept it the more likely it is that the gift has been accepted. It all depends upon the surrounding facts.

Acceptance of any part of a gift precludes any refusal of the gift.

[maths]

Not quite on point but the case of Scott v HMRC [2015] UKFTT makes interesting reading.

[tax_schmax]

Thank you for that. I infer from this that physically paying in the cheque is acceptance, but perhaps refunding a direct transfer into the bank baxck to the donor, would be refusal?

[maths]

Will of course depend upon the facts.

But if the donee was unaware of the transfer and having found out monies had been credited transferred them back as soon as the discovery had been made then the gift would have been disclaimed.

As you say paying in the cheque would amount to acceptance.