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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4723
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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My brother lives in Australia. I live in the UK. I am origonally

Customer Question

My brother lives in Australia. I live in the UK. I am origonally from South Africa but have lived in the UK for 23 years. My brother wants to send me a gift for a considerable amount. Either to me or to me and my children. I have 3 children
I have heard that there are no tax implications if I receive this money, but want this confirmed
Many thanjs
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question. Gifts are received free of tax in the hands of the recipient as there is no gift tax in the UK.If your brother is a UK National living abroad then he should be mindful of its implications for inheritance tax purposes. These gifts are treated as potentially exempt transfers for IHT purposes and the seven year rule applies to them. If your brother was to survive for 7 full years years from the date of gift, then it is exempt from the estate for IHT purposes.The recipient of the gift receives the gifted amount free of all taxes. 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 1 year ago.
My brother is not a UK national. He is an Australian national. If the bank or tax authorities ask for proof. Would it be fine at the time for my brother to write a letter confirming this. Is there any limit on the amount of the gift ?Many thanks
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your prompt reply.It would be wise to get a statutory declaration signed by your brother and witnessed by independent person confirming the amount given is a gift and nothing is expected in return for the gift, bearing in mind the amount is likely to be considerable.This could be presented to your bank to satisfy compliance with money laundering regulations and also to be used in the event the tax authorities were to make an enquiry into source of funds. there is no limit on amount gifted. I hope this is helpful and answers your question.
Customer: replied 1 year ago.
I have been told that it is better for me to open a bank account in my name outside the UK. My brother then pays the gift into the overseas account which I can then transfer to my UK bank account. does this make sense ? Why is this necessary ?
Thanks
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.In my considered opinion, it is not necessary for you to open a bank account in your name outside the UK for this gift to take place.Whether the money is in your account or your brother's account, remitting the funds into a UK based bank account would trigger scrutiny for compliance with Money Laundering Regulation. For that reason, it is important to have a statutory declaration in place to satisfy the requirements. I hope this is helpful and answers your question.

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