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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4882
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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My parents who are based abroad (Russia) would like to give

Resolved Question:

My parents who are based abroad (Russia) would like to give me some money for an initial deposit for a flat in the UK. My question is - if this money is brought to the UK, would it be subject to tax and what is the best way for me to receive this sum (e.g. from their Russian account to my UK account or my offshore account / from my own Russian account to my UK account etc)? Thanks!
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.

Hello and welcome to the site. Thank you for your question.

If your parents are giving you this money as an unconditional gift (i.e. they don't expect anything in return) then there is no taxation to pay on this money in your hands. In this country, the recipient of a cash gift receives it free of tax. You don't have to report it to HMRC on your tax return either.

Money can be transferred from their bank account in Russia into your bank account in the UK. You should make your bank in the UK aware of the impending receipt to comply with Money Laundering Regulations. It would be advisable to have a proper document drawn up and signed by all parties concerned to confirm the funds being given to you by your parents are a gift. This should help you in the event there was an enquiry at a future date.

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.

Customer: replied 2 years ago.

Thanks a lot. Does it depend on the sum of money given as a gift? Is there a limit on the tax-free cash gift amount? I have read somewhere it is 10K. Also, does it matter if I use offshore or onshore account? Thank you

Expert:  taxadvisor.uk replied 2 years ago.
Anastasia, thank you for your prompt reply.

There is no upper limit on the amount that can be given as a tax-free cash gift.
I would use the UK bank account if you have one for ease and to comply with Money Laundering Regulations.

I hope this is helpful.
Customer: replied 2 years ago.

Thank you.

Finally, could you please refer me to some source online which can confirm the point above on the tax-free cash gift and my responsibilities as an individual under Money Laundering Regulations?

Expert:  taxadvisor.uk replied 2 years ago.

Thank you for your reply..

Here is a link to an article in the money section of The Guardian. It confirms there are no direct taxes on gifts.

http://www.theguardian.com/money/2003/nov/07/finance1

see also this article

http://www.theguardian.com/money/2012/jan/11/financial-gift-liable-income-tax

Here is some guidance from HMRC on Money Laundering Regulations

http://www.hmrc.gov.uk/mlr/

I hope this is helpful and answers your question.

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get credited for it.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4882
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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