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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My fiancé who resides and works in Saudi Arabia, wants to

Resolved Question:

Hi, my fiancé who resides and works in Saudi Arabia, wants to give me £50,000 contribution towards my mortgage. He doesn't reside in Uk so does not pay income tax here. However he does have a British passport because although he was born in South Africa, his father was British. I wonder whether this gift would have tax implications to either of us?
Submitted: 9 months ago.
Category: Tax
Expert:  TonyTax replied 9 months ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Expert:  TonyTax replied 9 months ago.

Recipients of gifts don't pay tax on them in the UK so you won't be taxed personally. So long as your fiance is not a UK resident for tax purposes, he will not be liable for UK tax on his earnings.

As your fiance appears to be a British national, the gift may be a potentially exempt transfer for Inheritance Tax purposes. However, so long as he lives for seven years after making the gift, it will not form part of his estate and will escape IHT. If he has never lived in the UK, then he may be able to claim that he is non-UK domiciled in which case there would be no possibility of an Inheritance Tax should he die within seven years of making the gift. Look here for information on Inheritance Tax.

I hope this helps but let em know if you have any further questions.

Customer: replied 9 months ago.
Would he be able to just make a bank transfer from his account in Saudi to mine in U.K., or would there need to be some other supporting documentation? E.g. Recording the fact that it is a gift?
Customer: replied 9 months ago.
Also I dont understand why IHT would come into it if he is non-resident for tax purposes. If he has earned the income in Saudi tax free, why might it be subject to U.K. Inheritance tax? Even with the 7 year rule. Thanks
Expert:  TonyTax replied 9 months ago.

A bank transfer would be fine but you should give advance notice to your bank to avoid their money laundering software causing problems given the size of the transfer. It would be a good idea to have a letter from your fiance setting out the details of the gift.

Residence has nothing to do with IHT. It's governed by domicile. You can read about domicile in section 5 here.

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