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Where Taxpayers and Advisers Meet

Gift - IHT

bradford3313
Posts: 2
Joined: Thu Jun 27, 2019 3:26 pm

Gift - IHT

Postby bradford3313 » Thu Jun 27, 2019 3:31 pm

Hello,

just want to clarify whether there is any difference in the inheritance tax laws in the UK related to gifts, if that gift is coming from overseas?

I understand there is a £325k tax-free limit for inheritance and that any gift of £100,000 is tax free, but would reduce the £325 limit if giver (in this case, a parent) dies within 7 years. However, does this remain true if the gift giver (parent) is living in Canada? Or does it make a difference? The receiver, my wife (UK domiciled, working in UK) and myself (UK citizen) would receive the funds in our joint account.

Thanks

AGoodman
Posts: 785
Joined: Fri May 16, 2014 3:47 pm

Re: Gift - IHT

Postby AGoodman » Mon Jul 01, 2019 4:58 pm

IHT is dependent on the donor, not the recipient. The nil rate band is that of the donor.

The gift is unlikely to be relevant for UK IHT unless the parent(s) making the gift are UK domiciled or deemed domiciled. Nb This is not the same a residence and if they were UK domiciled, they will remain so for at least 3 years after becoming non-resident - likely more than this.

If they are UK domiciled, deemed domicile, or the cash is coming from the UK, it will be a PET and only an issue if they fail to survive for 7 years. If they didn't survive it would be taken into account when calculating the value of parent(s) estate for UK IHT.

bradford3313
Posts: 2
Joined: Thu Jun 27, 2019 3:26 pm

Re: Gift - IHT

Postby bradford3313 » Wed Jul 03, 2019 5:32 pm

IHT is dependent on the donor, not the recipient. The nil rate band is that of the donor.

The gift is unlikely to be relevant for UK IHT unless the parent(s) making the gift are UK domiciled or deemed domiciled. Nb This is not the same a residence and if they were UK domiciled, they will remain so for at least 3 years after becoming non-resident - likely more than this.

If they are UK domiciled, deemed domicile, or the cash is coming from the UK, it will be a PET and only an issue if they fail to survive for 7 years. If they didn't survive it would be taken into account when calculating the value of parent(s) estate for UK IHT.
Thanks!


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