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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4996
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I don't know if you can help me but we have a client who

Resolved Question:

Hi
I don’t know if you can help me but we have a client who is due to inherit a large sum of money from a trust in Australia – Are there any CGT implications of this for her in UK? She doesn’t want the money and wants to gift it to a charity in Australia. I know gifts in the UK are not subject to IHT when she dies (she is 86) but is this also the case for gifts to overseas charities do you know?
Thanks very much.
Claire Udall
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Thank you for your question.The only CGT implications would be if your client were to invest the money and then dispose of the assets during her life time and these assets realised a gain on disposal. Otherwise there are no CGT implications.Gifting the money to charity in Australia -An estate doesn't have to pay IHT on any gifts given to charities provided these charities are registered with HMRC and have a HMRC charity reference number.This concession is extended to gifts to Charities registered with respective tax authorities within EU member states but not outside EU member states.You may find this article here helpfulhttp://www.terrafirmachambers.com/articles/TaxReliefforGiftstoEuropeanCharities.pdf 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.
So how does it work Australia as not being a member state - that is my real question I need the answer to. Thanks
Expert:  taxadvisor.uk replied 2 years ago.
Thank you for your reply.Gifts left for charities outside the EU member states do not qualify for exemption (only charities having a charity reference number with HMRC or appropriate member state within EU qualify). So if funds were left for a charity in Australia in your client's will, these would be included as part of the estate for IHT purposes.Gifts made to the charity in Australia during life time would be regarded as potentially exempt transfer and the seven year rule would apply.I called HMRC on your behalf and the above was confirmed by someone dealing with IHT matters.I hope this is helpful
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Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes.