Thank you, ***** ***** don't understand your final line - the free info one.
Are you saying that if my sister gives me 3.5 acres of land plus 1 barn as a gift that SDLT does not apply? I also don't understand the phrase 'money's worth' - sure the land and barn are worth money?
What are the 'many things' that the gift could be taxed on?Income tax bands, Capital Gains for instance?
Can you tell me if you're based in the UK - I notice your answer was posted in EST rather than GMT? The original expert I was assigned to was ex-HMRC which was ideal, but for some reason I've been re-assigned to you. Not your fault obviously, but I would have preferred a UK based expert.
Hello, I'm Keith and happy to help you with your question.
Actually your question is much bound up with Inheritance Tax (IHT)! TaxRobin has already told you we do not have a gifts tax in the UK. Thank your lucky stars you don't live in France where gifts tax starts at 5K Euros. There is no limit as to what you may be given. However, any gift creates a Potentially Exempt Transfer (PET) in the estate of the donor for IHT purposes. PETs run off over 7 years at a taper and in the event of decease within that time are added back to the donor's estate for IHT. PETs are the first items to suffer IHT and if the estate is insufficient to meet the tax due then it cascades down to the beneficiary for immediate payment. The classic defence against this is a reducing term life assurance on the donor's life.
IHT kicks in at 325K of assets although this figure is inflated my any charitable and certain other bequests, particularly those of an inter spousal nature. IHT is levied at 40% flat rate on any surplus and the rate falls to 36% if over 10% of the deceased estate is passed to charities. So you see that gifts in the UK are outside the scope of UK taxation save for the latent danger of PETs.
I do hope I have helped you with your query.
Thank you for both your responses - much appreciated thank you.
That has given us much food for thought, especially the advice on a reducing life assurance - we've used that in other situations in our family, but it hadn't occurred to us to use it here.Great idea - thanks.