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Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 15707
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Sam! I have a questions about gift tax. From non-UK resident to UK resident. My f

Customer Question

Hello Sam! I have a questions about gift tax. From non-UK resident to UK resident.
My father (non UK resident) is gifting me the funds to buy a property in the UK. His funds are in Europe and would be transferred straight to the solicitors in the UK.
I will be the owner of the property.
Does the 7 year gift tax applies to me if my father passes away? Or it doesnt as he's a non UK resident?
Submitted: 1 year ago.
Category: UK Tax
Expert:  Tony Tax replied 1 year ago.
Hi.

Is your father a British national, ie UK domiciled?
Customer: replied 1 year ago.
No he is not, he is a Russian citizen
Expert:  Tony Tax replied 1 year ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  Tony Tax replied 1 year ago.
Hi again.

Liability to UK Inheritance Tax revolves around domicile, not residence. Take a look at section 5 here for information on domicile.

As your father is not UK domiciled, only his UK based estate (assets) over and above the nil-rate band which is currently £325,000 will be liable to UK Inheritance Tax. This excludes cash held in UK banks denominated in currencies other than Sterling (UK Pounds).

As your father will be making the gift to you from funds held outside the UK, UK IHT will not apply so long as the funds are held by the solicitor for you as opposed to for your father. Therefore, the seven year clock will not apply.

I hope this helps but let me know if you have any further questions.
Expert:  Tony Tax replied 1 year ago.
Hi again.

It's been a few days since I answered your question. Is there anything you need further clarification on?

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