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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 3738
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am an Irish resident and wish to give my son who is UK resident

Resolved Question:

I am an Irish resident and wish to give my son who is UK resident a monetary gift of £50000. Am I right in thinking that if this gift is given from an Irish based Euro account that there is no UK tax implication for him whereas if the gift is given from a UK based sterling account there is liability for gift/inheritance tax.
Submitted: 1 year ago.
Category: UK Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello, if you have any questions or need further clarification after reading my answer please let me know.

 

Thank you for your question..

 

First of all, monetary gifts received by one in this country are treated tax free. There is no tax payable on this gift in the hands of the recipient, irrespective of the type of bank account used to remit the funds. So, I'm afraid you are not correct in your thinking that if the gift is given out of Irish based Euro account there is no tax implication on your son.

 

Secondly, inheritance tax is normally paid out of the estate of the deceased and not the recipient of the gift. This is the position as far as Inheritance tax rules are applicable in the UK.

 

You may wish to ascertain your position in relation to Irish tax rules on gift/inheritance tax.

 

If you need more information please let me know before you rate my service.

 

I hope this is helpful and answers your question. I am available for any follow up questions you may have, and you can use the reply button to post your follow up questions to the page. If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

 

 

Customer: replied 1 year ago.

I am particularly referring to the following paragraphs and note that my UK assets are taxable while foreign currency assets are excluded.This surely has a bearing on total inheritance thresholds in the event of my not surviving for 7 years after the gift was given


 


 


Which assets are taxable in the UK?


Generally, if you are domiciled, or deemed to be domiciled, in the UK, inheritance tax applies to your assets wherever they are sited.


If you are domiciled abroad, inheritance tax applies only to your UK assets. However, if you are domiciled abroad there is no charge on excluded assets and we may remove certain other types of UK assets from the tax charge. For more information on excluded property see 'What is excluded property?'


 


 


Foreign currency bank accounts


We exclude balances on non-sterling accounts with a bank or the Post Office from inheritance tax on death if they are held by



  • an individual not domiciled, resident or ordinarily resident in the UK, or

  • trustees not domiciled, resident or ordinarily resident in the UK on behalf of an individual with an interest in possession in the account, if the settlor was not domiciled in the UK when the settlement was made.


 

Expert:  taxadvisor.uk replied 1 year ago.

Tony, thank you for your reply.

 

You have to draw a distinction between your assets and those of your son (the recipient of the gift) for the purpose of gift/inheritance tax.

 

In your question you stated "wish to give my son who is UK resident a monetary gift of £50000. Am I right in thinking that if this gift is given from an Irish based Euro account that there is no UK tax implication for him whereas if the gift is given from a UK based sterling account there is liability for gift/inheritance tax"

 

As far as your son is concerned, he is a UK resident for tax purposes and will be receiving the monetary gift. Whether the money is paid out of a UK based account or overseas based account, the gift would be free of tax in his hands. Your question was about tax implications for your son receiving a gift of £50,000 and my answer covered that concern.

 

Generally, if you are domiciled or deemed domiciled in the UK, inheritance tax applies to your worldwide assets. If you are domiciled abroad, UK Inheritance tax applies only to your UK based assets. The reference you have sited from HMRC website would be applicable to you and not your son.

 

Customer Guide states and I quote" Foreign currency bank accounts - we exclude balances on non-sterling accounts with a bank or the Post Office from inheritance tax on death if they are held by an individual not domiciled, resident or ordinarily resident in the UK."

 

More information on what is included or excluded for inheritance tax for individuals who are not domiciled in the UK can be found here

http://www.hmrc.gov.uk/cto/customerguide/page20.htm

 

I hope this is helpful and answers your question. I am available for any follow up questions you may have, and you can use the reply button to post your follow up questions to the page.

 

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it....

 

taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 3738
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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