Hi, im wondering if someone could give me some advise. a very close family friend is send money over to me as a gift from the UAE (over £5 million) and we have all the paperwork to show this money is clean and real. does the bank notify the tax man? do i need to pay tax on this money as its a gift? if i don't declare the money to the tax man can i still spend it?also if i was to buy properties in the UK outright buy (no mortgage) and rent them out. ofcorse i will pay tax on any rent revenue i earn but will the tax man make me pay tax on buying that property or am i allowed to spend on what i like without paying tax on the gift money i get?
System of Law: England-and-Wales
Is the money a gift out of natural love and affection - i.e. they do not want the money back and it is not in return for any service rendered or otherwise please?
correct its a gift out of natural love and affection, and dont need to pay it back
Thanks. I assume you are comfortable that this is not a scam - I mention this not out of any disrespect to your family friend but for the sake of completeness as you will be aware of many such scams offering to send you money and so on. Do ensure that you are entirely comfortable that this is not and the source of the funds as you do not want to find yourself implicated in any form of money laundering charges.
correct, all money is genuin and bank have also done there checks to make sure the money is legal.
Providing you are entirely satisfied in this respect from there it would sensible for you to consider asking for written confirmation that the money is a gift. Ideally this would be in the form of a deed or the equivalent in the UAE.
The reason for this is that you have conclusive evidence that the money is a gift rather than a loan etc. You do not want to find yourself in a situation that your family friend is asking for the money back in a few years claiming that it was not a gift at all.
i understand letter i have already as the bank requested this.
In terms of tax the UK does not charge tax on gifts received. There may be tax to pay in the UAE by your friend but presumably he will take his own advice in this respect. However in the UK there is no tax to pay on the receipt of a gift. You will need to pay tax on any income you receive on the money (e.g. interest) but not on the gift itself.
Is there anything above I can clarify for you any further?
so i dont need to declare the money to HMRC
and i can buy propeties with the money without haveing to worry about HMRC questionion how al of a suddent i have many properties
There is no need to tell HMRC about your receipt of a gift. If you are self-employed, it is wise to keep the evidence that it is a gift. The reason for this is that if you are self employed and you are the subject of a tax enquiry HMRC might assume the gift is income from your trade/self-employment, if you can’t prove otherwise. However there is no need to notify them of the gift.
You can buy properties etc. If you are questioned by HMRC at any point you will have the evidence of the gift referred to above to show that you received the money as a gift.
im currently working and looking to go self employed once i get the gift. this wont be an issue if i have the letter of gift
Thats right. Keep the evidence you have of the money being a gift in your files in case it is needed in the future as above.
Is there anything else I can hep you with?
perfect, also the bank cannot hold the fund and will alow me to spend how i want?
as the bank manager seems to claim i am unable to spend alot at a time
The bank can make enquiries as to the source of the monies to satisifed itself that it is not from a criminal source. It will tell you its requirements in this respect - normally a letter from the senders bank or his solicitor will be sufficient. Subject to this formality the money is yours and the bank manager has no say in how you choose to spend it.
cool, all letters have been given bank manager saying he wont relase the money untill wednesday and then im not allow to transfer all the money to my second account in one go he goes he will only allow me to send £10,000 per month is this right?
What justification has he made for this?
he wont say he is just being rely unhelpful. my other bank says i can move the money spend the money how i want once the bank clears the money.
but this bank manager is saying he wont allow it and the money should stay in there bank
Unless there is a restriction on the product type with the bank (i.e. the account only allows limited withdrawals - this can be the case with some savings accounts and bonds) the bank has no right to tell you how you can and can't spend your money. If you are unsatisified with the bank managers response, consider a complaint to a senior relationship manager and then to their complaints department. Ultimately you can refer the matter to the Financial Ombudsman if you remain unsatisfied with the banks response.
perfect, thank you once again for your help and advise
If you have no further questions for now I should be very grateful if you would kindly remember to click ACCEPT in order that I am credited for my time.Kind regards
it has rely made things clear and at least i can sleep at night noing im on the right path
i will do so now. have a great day sir
And to you.
LL.B (Hons), Prof Dip Law & Practice. 9 years experience in private practice in England