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taxadvisor.uk, Chartered Certified Accountant
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Hi All, I have three unusual questions on monetary gifts

Resolved Question:

Hi All,

I have three unusual questions on monetary gifts and inheritance tax between the USA and the UK.

My mother married an American and is now a naturalised US citizen living in the US full time, I’m British, I work full time in the UK and pay the standard rate of UK TAX and am obviously UK resident, I have no siblings.

My mother wants to gift me some money on a regular yearly basis and also as my father in law has no relatives and now they both want to leave their estate to me, which will probably run into about $600k - $1M dollars.

From the American point of view, they have taken legal advice and have been told that they can gift $14,000 per year legally without paying tax or it having any inheritance tax implications in the US.
They are also getting legal advice on inheritance and transferring money to the UK in the event of their deaths.

My mother has no UK assets except for a bank account with a few thousand pounds which they use when they come over to visit. So from their point of view they believe they are covered completely under US law for inheritance, but where do I stand as a UK person. ?

I have three questions:-

My first question is how much can I receive as a gift on a yearly basis without paying tax on it ?. I am married (no children) so although I say me, the gift can be split between my wife and I if that makes a difference.
My wife is ill and on benefits as she cannot work, her illness is not life threatening but she will never be able to work again due to its impact on her.

My second question is long term, obviously my father in law will put the legal framework for inheritance in place at his end, so all tax will be paid, but then the remainder will be brought over here to the UK . Is there a tax liability for me ?.

My third question is, Is this the best way to deal with this issue and if there are tax implications what can I do about them ?.


Thanks XXXXX [email protected]
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

I have three questions:-

[q]
My first question is how much can I receive as a gift on a yearly basis without paying tax on it ?. I am married (no children) so although I say me, the gift can be split between my wife and I if that makes a difference.
My wife is ill and on benefits as she cannot work, her illness is not life threatening but she will never be able to work again due to its impact on her.

[a]
There is no limit on monetary gifts receivable by an individual. The recipient of the gift receives it free of any taxation. The gift should have no conditions attached to it i.e. you are not expected to do something in return for the money gifted.

[q]
My second question is long term, obviously my father in law will put the legal framework for inheritance in place at his end, so all tax will be paid, but then the remainder will be brought over here to the UK . Is there a tax liability for me ?.

[a]
Inheritance tax is payable by the estate of the deceased and any distribution of funds post tax if any carries no futher taxation if that money was to be brought into the UK. If the amounts are significant then closer to the time of transfer, you should advise your bank of impending transfer to abide by Money Laundering Regulations.

[q]
My third question is, Is this the best way to deal with this issue and if there are tax implications what can I do about them ?

[a]
Based on what you have said, there should be no tax implications that you should be concerned about.

I hope this is helpful and answers your question.


If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.


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Expert:  taxadvisor.uk replied 3 years ago.
Paul, I thank you for accepting my answer.
Your reward of a bonus is greatly appreciated.

Best wishes