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Where Taxpayers and Advisers Meet

gifts before becoming domiciled

tiengodue
Posts:29
Joined:Sat Sep 05, 2020 10:01 am
gifts before becoming domiciled

Postby tiengodue » Sun Nov 01, 2020 7:16 pm

Hello,

If an individual gifts cash to a children before becoming uk deemed domiciled, would these gift be subject to iht
if said individual dies within seven years and has become uk domiciled during that time?

Regards,

Samson22
Posts:58
Joined:Mon Aug 17, 2020 10:54 am

Re: gifts before becoming domiciled

Postby Samson22 » Sun Nov 01, 2020 7:19 pm

Provided they are not domiciled at the time of the gift then no. Perhaps evidence to back this up would be a good idea though

tiengodue
Posts:29
Joined:Sat Sep 05, 2020 10:01 am

Re: gifts before becoming domiciled

Postby tiengodue » Mon Nov 02, 2020 9:20 am

hi,

do the gifts still need to be included i. the relevant hmrc iht forms?
one is supposed to include all gifts within seven years of the passing away of the donor
and I don't think there is a box to indicate non domiciled status at time of gift.

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: gifts before becoming domiciled

Postby maths » Mon Nov 02, 2020 1:32 pm

If the cash gifted is in the UK at the time of the gift then the gift falls within the charge to IHT whether the donor is UK or non-UK domiciled.

The gift in such a case is a potentially exempt transfer. If death occurs within 7 years it is chargeable to IHT but may fall within an exemption or the donor's nil rate band (£325,000).
If it falls within the nil rate band the amount of the band available for offset against the donor's estate on death is correspondingly reduced.

tiengodue
Posts:29
Joined:Sat Sep 05, 2020 10:01 am

Re: gifts before becoming domiciled

Postby tiengodue » Mon Nov 02, 2020 8:50 pm

If the cash gifted is in the UK at the time of the gift then the gift falls within the charge to IHT whether the donor is UK or non-UK domiciled.

The gift in such a case is a potentially exempt transfer. If death occurs within 7 years it is chargeable to IHT but may fall within an exemption or the donor's nil rate band (£325,000).
If it falls within the nil rate band the amount of the band available for offset against the donor's estate on death is correspondingly reduced.
hi maths so basically a donor non dom status does not help at all if the cash is gifted from a uk based account?

what happens if the cash is gifted from a foreign bank account owned by a non dom uk resident?

many thanks

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: gifts before becoming domiciled

Postby maths » Mon Nov 02, 2020 9:42 pm

hi maths so basically a donor non dom status does not help at all if the cash is gifted from a uk based account?
Correct.

what happens if the cash is gifted from a foreign bank account owned by a non dom uk resident?
Then it's a gift of excluded property and no IHT. Monies in a UK bank account could be transferred to a non-UK bank account and the donor then gifts from the foreign account.


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