How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3371
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

A friend in the US is giving me in the region of £70k. This

Resolved Question:

Hi. A friend in the US is giving me in the region of £70k. This is not a loan as there's no requirement to pay back. How would I treat this from a tax point of view as I an self assessment. Also, what's the most tax efficient manner of dealing with this ie is there a tax liability if it's put direct into my pension fund.
Submitted: 7 months ago.
Category: Tax
Expert:  bigduckontax replied 7 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

The UK has no gifts tax regime so this 70K comes to you tax free. Just warn your bank of incoming funds and their source to preclude any money laundering inquiry a large sum might attract. A gift does not have to be declared on your self assessment although any interest earned from its deposit is liable to Income Tax (IT) in the normal way and you will have to note it on your return. If you put in say a SIPP or indeed any other private pension then watch out for the annual limit, currently 40K, but with a SIPP you can go back three years to mop up any unused contribution levels. You do not need to use such tax avoidance anyway as I have told you the receipt of this sum is outside the scope of UK taxation.

I do hope that I have set your mind at rest on this matter.

Customer: replied 7 months ago.
Hi Keith. Is the tax free status because it's coming from the US?
Expert:  bigduckontax replied 7 months ago.

No, it is tax free because it is a gift. The same would apply to any gift world wide, tax free.

The sun has got his hat on, hip hip hip hooray!

Customer: replied 7 months ago.
Thank you. I was under the impression that you could only gift a certain amount a year tax free provided you survived for 3 years.. I'm thinking more around inheritance tax I think.
Customer: replied 7 months ago.
Also, do I need him to write a letter outlining that it is a one off gift. Thank you.
Expert:  bigduckontax replied 7 months ago.

I think you are concerned about the seven year rule for UK gifts which can spill into the donor's Inheritance Tax (IHT) over that period. This does not apply to an US resident citizen or their gifts.

Yes it is a good idea for the gift to be evidenced in writing just in case of inquiries.

Please be so kind as to rate me before you leave the Just Answer site.

Customer: replied 7 months ago.
Thank you very much.
Expert:  bigduckontax replied 7 months ago.

Delighted to have been of assistance.

Please don't overlook my rating.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3371
Experience: FCCA FCMA CGMA ACIS
bigduckontax and 2 other Tax Specialists are ready to help you
Expert:  bigduckontax replied 7 months ago.

Thank you for your support.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions