Inheritance/Gift Tax Help

[Archerma1954]

I apologize in advance for my lack of knowledge in this matter. I am new to this forum.
We researched as much as we could on line but did not find any answers to our issue.

We are Canadian citizens, living in Canada. Our daughter, also born in Canada currently living in the UK (almost 5 years) would be considered a non dom UK resident to the best of our knowledge.
To get her onto the property ladder, we are hoping to give her a small amount of money to get her going. We understand the $3,000 annual gift exemption from inheritance tax, and we also understand the 7 year rule on gifting larger amounts up to the 325,000 inheritance tax free limit. What we do not know is whether these regulations apply to monetary gifts coming to her from outside the UK.
Can anyone provide some insight?
Any information would be greatly appreciated. Thank you in advance.
M

[AdamS93]

Hi Archerma,

On the presumption that you (and your spouse) are neither UK resident nor UK domiciled only your assets situated in the UK will be subject to UK IHT. Therefore, if you are gifting cash from a bank in Canada to the UK then, if you where to pass in the 7 years from the date of the gift there would be no UK IHT consequences. It would have to be an outright gift.

If you are gifting UK assets to your daughter there will be UK IHT to consider but from reading the OP this doesn't seem to be the case.

However, I haven't the foggiest idea about Canadian IHT law...

[Archerma1954]

Thank you for the information Adam.
It's reasuring and supports what we hoped to be the case.
And yes, the money would be an outright gift with no strings attached.

Cheers
Marcella

[Archerma1954]

Hello again
Appears we have run into some issues.
We have been advised ( by a mortgage broker) that since we are non UK nationals and non UK residents , that the money coming into the UK as a gift for our daughter would have to be deposited into an account in UK carrying my name before I can gift it to my daughter.
I fail to see how a foreign national and a non resident of UK would I be able to open an account in my name ( tried that when my daughter initially moved to the UK 5 years ago) was not able to that at that time.
If its an uncoditional cash gift with no strings attached paying for a deposit on the purchase of a property, with no interest in this property on my part, I do not understand this bank account requirement? Can anyone please explain/comment?

Also , does the amount of the gift play a role? in this case we are talking about 33,000 BPS. not a huge amount.
Thank you again in advance for any infomration and or clarification you may be able to provide.
Cheers
M

[AGoodman]

I assume this was a UK mortgage broker.

This definitely isn't a tax issue. I can only think it comes down to anti-money laundering and source of funds. Either way, there is no definitive rule and I would have thought bank statements in your name and her name showing the debit/credit together with a letter from you saying you have given the money to your daughter outright should be sufficient.

Definitely worth getting the broker to explain him/herself, the reason for it and why the above would not work.

It is quite possible he/she does not understand it.

[Owensr]

Hope something can help. My mother who is a UK citizen and has been resident in the Uk all her life has just sold her house in order to cover ongoing residential care costs. She ia looking to gift some money to her children but is concerned Re the tax implications. Her estate is valued less then the inheritance tax threshold of £325k but she is looking to gift more than the £3k allowance? Can anyone confirm that no tax would need to be paid?

[AGoodman]

No tax would need to be paid. Worst case, if she did not survive 7 years, the gift would just be added back into her estate when calculating IHT. It sounds as though it would still be below the £325k (possibly £650k if your mother is a widow).