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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5113
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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A friend has offered to pay for the remainder of my

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A friend has offered to pay for the remainder of my children's private school fees as a lump sum. Is there any tax liability for her?

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Many thanks

Thank you for your question.

Please advise the lump sum amount ..

Many thanks

Customer: replied 3 months ago.
Customer: replied 3 months ago.
She will pay the lump sum direct to the school. I want to know if there is any tax liability for me.Alex

Thank you for your reply and additional information.

I presume the friend making the payment is paying the school fees for no favours in return and it can be deemed a gift.

That being the case, the recipient of the gift receives it free of tax as there is no taxation on gifts.

Bearing in mind the size of the gift, it would be treated as a potentially exempt transfer on her part for IHT purposes and this amount will be covered by the seven years rule. Provided she survives for seven full years from the date of making the gift, the gifted amount would be excluded from her estate and out of scope of IHT. More information on PETS can be found here

I hope this is helpful and answers your question.

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