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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4995
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Are gifts to siblings taxable

Resolved Question:

are gifts to siblings taxable
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.

Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your question.

Gifts are not taxable in the hands of the recipient. There is no tax on gifts and the recipient receives it free of tax.

Furthermore, you don't have to report them on your tax return.

If you are receiving a gift from your sister and it exceeds £3,000 annual gift allowance, she should be mindful of the fact that this gift is deemed a potentially exempt transfer for inheritance tax purposes and the seven year rule applies. If she survives for 7 full years from the date of the gift then this amount is out of scope of inheritance tax.

More information on gifts and IHT can be found here

http://www.which.co.uk/money/tax/guides/inheritance-tax-explained/inheritance-tax-planning-and-tax-free-gifts/

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.
If I receive 7 or 8 gifts distributed across the year from the sibling ? In this case will the gifts be taxable ?
Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your reply.

Gifts are not taxable whether you receive in one go or spread across the year. The have forwarded you a link that explains how gifts are treated for inheritance tax.

I hope this is helpful.

Customer: replied 1 year ago.
What evidence do i need to keep with me to prove that it is a gift ?
Expert:  taxadvisor.uk replied 1 year ago.

Thank you fo ryour reply.

You should have a declaration of written statement from you sister stating that the amounts being given to you are gifts and there she is not expecting anything in return for that gift.

You should retain this document in the vent HMRC were to make any enquiries into your tax returns. This document is also necessary to comply with money laundering regulations. If the amounts are large, you should alert your receiving bank of impending receipts.

I hope this is helpful.

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Expert:  taxadvisor.uk replied 1 year ago.

I thank you for accepting my answer.

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Best wishes