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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 any gift is tax free in the recipients hands. Just thank your lucky stars you don't live in France, where gifts tax kicks in at 5K euros!
A gift creates a Potentially Exempt Transfer (PET) in the donor's Inheritance Tax (IHT) affairs. PETs run off at a taper over 7 years and in the event of a death within this period are added back to the donor's estate for IHT purposes. PETs are the first to suffer IHT and if there are insufficient funds to meet the tax on the PET then the liability cascades down to the beneficiary for immediate payment. IHT does not, of course kick in until 325K of assets on decease.
I do hope that you have found my reply of assistance.
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