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Madam, I am about to buy a house first

Resolved Question:

Dear Sir/madam,
I am about to buy a house for the first time here in the UK in London and my parents have kindly contributed a gift towards the deposit of the house (gifted deposit). Is there a maximum to the cash gift that my parents can give me for the house and what other tax implications are there that I should be aware of? I spoke to my mortgage person and solicitor but they only advised that I should speak to an accountant, but I thought I should ask you as well.
Note the following: my parents are contributing £350,000 towards the deposit, £200,000 of which have been sitting in my savings account for at least 12 months. The remainder will come within the next few months. My parents are Indonesian citizens and therefore live overseas permanently for all legal purposes. I am permanently resident here in the UK and I am a UK citizen.
Thank you for your time.
Andrian
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.

There is no limit to the amount of a gift you can receive from anybody as far as the UK is concerned. It would be as well for you to inform your bank in advance of a large transfer into it from abroad to avoid problems with UK banks money laundering regulations.

You won't pay tax on the gift so long as it is made to you from non-UK based assets. There would only be UK Inheritance Tax to pay by you if the gift was made from UK based assets and your parents passed away within seven years of making it to you and there was not enough money in their estates to pay the IHT liability.

As your parents are non-UK domiciled, only their UK based assets would be liable to UK Inheritance Tax on their passing away. UK Bank accounts denominated in non-UK currency are not treated as UK assets for Inheritance Tax purposes. So, as long as the gift to you was made from non-UK assets, there can never be a UK Inheritance Tax charge on your parents' estates on that gift.

I hope this help but let me know if you have any further questions.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15850
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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