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Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 15709
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am a Pakistani national but resident in UK and working in

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I am a Pakistani national but resident in UK and working in a bank. I am married and my wife is not working. We are planning to buy a house in London. We plan to take a mortgage. My father-in-law is helping out by giving a gift of GBP 100k to my wife which we will use towards the deposit on the house. Would my wife or I need to pay any form of tax on this GBP 100K gift money transfer? The money will be transferred directly from my Father-in-laws banks account in Pakistan to my wife's bank account in UK
Hi.

Neither you nor your wife will have to pay any tax on a cash gift from your father-in-law. If the money is placed on deposit pending the purchase of a house, any interest received will be taxable, however.

It would be as well to inform your wife's bank in advance of the transfer into her account as they have money laundering procedures to follow and it will help to ensure you are able to access the money when you need it. You should also ask your father-in-law to write a letter to your wife confirming the gift so that you have evidence of the provenance of the money.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.

Thanks Tony. this is helpful. Three last points:


 


1) If my wife then transfers this gift money from her account in UK to my account in UK then how will this money be treated from tax perspective? Will i need to disclose this in my yearly tax assessment if yes then as what?


 


2) Will my wife have to disclose this gift money to HMRC. Right now she does not file any tax as she is not working and does not have any income other than some nominal interest on bank deposit

1 Transfers of money between spouses are tax neutral. You don't have to report it in your tax return. You just need to be able to prove where it came from if you are asked about it by the tax office. It won't be taxed.

2 There is no need for your wife to report the gift to the tax office. It isn't taxable. The bank interest will probably have tax deducted at source so if your wife is a non-taxpayer she will be entitled to claim the tax back.
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