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taxadvisor.uk, Chartered Certified Accountant
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If you want to pass on some of the benefits of inheriting money

Resolved Question:

If you want to pass on some of the benefits of inheriting money thru sale of a house, what are the tax implications for either yourself or the person receiving the gift?
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Tax implications for person receiving the gift

Provided you have gifted money without any conditions attached to it, i.e. needing something in return for that money, then this money is received tax free in the hands of the recipient. There is no tax on cash gifts in the UK.

Tax implications for person gifting the money
This gift would be regarded as a potentially exempt transfer and the seven year rule would apply ..you would have to survive for seven years after the date of the gift and not retain any interest in the gift.

More information on this can be found here

https://www.gov.uk/inheritance-tax/gifts

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.

Yes but if the gift is more than £3,000 (I was thinking of giving approx £20,000 to both of my children) is this not more than allowable thru gifts? so would it not therefore be taxed? the money would originate in my inheriting and selling a property.

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

There are gifts that are totally exempt and they fall in the annual exemption category. They are covered under the heading "gifts you don't pay inheritance tax on". You can read more about it on the link I forwarded in my last answer.

Then there are gifts that are potentially exempt transfers and your proposed gift falls in this category. If you were to survive for seven years after making a gift that is deemed potentially exempt transfer then the amount would be outside the scope of interitance tax irrespective of the value.

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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