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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I want to make a regular gift of money to my aging parents

Customer Question

I want to make a regular gift of money to my aging parents who are resident in the uk ( I´m resident out of the EU) What are the tax implications for myself and parents
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.

As far as your parents are concerned, they won't have to pay UK tax on the cash gifts.

As for you, assuming you are a UK national and domiciled in the UK, so long as you live for at least seven years after making each gift, its value will not form part of your estate for Inheritance Tax purposes. Take a look here for information on Inheritance Tax and here for information on taper relief which applies three years after a gift is made and death occurs within seven years of the date a gift is made.

If the gifts can be shown to be gifts out of income as opposed to out of capital, then they can be treated as fully or partially exempt from Inheritance Tax. Take a look here and here for more information.

I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.

Hi,

Thanks for the answer , but as originally stated I am not tax resident in theUK, ( I live and run a business in HK) Could you let me know if this has further implications?

Expert:  TonyTax replied 1 year ago.

If you are a UK national, it makes no difference. I would have mentioned your residency status if it did. If you aren't a UK national, then only your UK estate would be liable to IHT in the UK. If as a non-UK national, you make the payments to your parents from funds held abroad, then IHT won't be an issue in any event.

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