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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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I am a non UK citizen/resident though EU. My two nephews and

Customer Question

I am a non UK citizen/resident though EU. My two nephews and niece are UK residents. They are not my direct heirs as their parents are the beneficiaries of my will - also UK citizens/residents. How much money-cash am I allowed to give to the young ones yearly, is there tax to be paid? I found all sorts of answers but only about parents and I am "only" an aunt. Thank you so much!
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with you question. The UK has no gifts tax regime so unlimited amounts may be donated without any tax liability arising. However, you should e aware that a gift creates a Potentially Exempt Transfer (PET) in your Inheritance Tax (IHT) affairs. PETs run off at a taper over seven years. In the event of a decease within this time period the PET is added back to your estate and is the first to suffer IHT. If the estate is insufficient to meet the tax on the PET the liability cascades down to the beneficiary for immediate payment. IHT is at 40% flat rate on any estate over 325K (36% if charitable bequests exceed 10%). The 325K limit is inflated by any charitable or inter spousal bequests. I do hope my reply has been useful. You can give away what you like. Just thank your lucky stars you don't live in France where gifts tax kicks in at 5K euros!
Customer: replied 1 year ago.
Hi Keith, thanks. As I mentioned, the children (between 25-30, all three working) are not beneficiaries of my will only their parents. Would they have to declare my gifts of cash or pay income tax?
Expert:  bigduckontax replied 1 year ago.
No, there is no requirement for them to declare these gifts. The only income tax liability would be if the gifts were invested in interest bearing securities and then only the interest element taxed. Please be so kind as to rate me before you leave the Just Answer site.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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