Dear All,
I have a query regarding receiving money from my in-laws who live abroad.
My elderly father in law who is resident in Hong Kong wishes to gift a large sum of money and investments to my wife and I (a 6 figure sum). He is domiciled / tax resident of Hong Kong and has never lived in the UK and has no assets in the UK. The gift would be sent directly from Hong Kong to us here in the UK where my wife and I are domiciled and tax resident. I understand there is no tax due on receipt of this. He is wishing to transfer the money as cash and mainly investments in the form ETFs with the intention that interest earned from this can be used for us and towards our children's school fees.
Should my father in law therefore directly gift some money / assets to the children in addition to us, or would it be ok to gift this directly to us and then we transfer some of this to the children later down the line? My concern with the latter is that if this money is subsequently transferred to the children it may seem to have come from us / the parents and therefore be subject to the 100 pound rule for interest earnings and may also have implications for our inheritance tax planning.
My second question is regarding trusts. Would it be more 'tax efficient' to set up a trust for the children and are there any recommendations on the type of trust (including that which would allow the funding of private school and university fees directly from this?)
I appreciate I will probably need to seek some expert tax advice but would appreciate some initial advice.
Many thanks!
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