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Broadly speaking, the receipt of a cash gift by a UK resident from a non-UK resident and non-UK domiciled individual should not cause any immediate UK tax issues. However, there are other factors which may affect this analysis. If you would like us to properly review your position please do feel free to contact us – our fees for this start from £1,250 plus VAT depending on the complexity of your situation.
We are often asked about the tax treatment of a cash gift from a non UK resident. Here is our Q&A
A. As with nearly all tax questions, it ultimately depends on the facts.
Your tax position
All things being equal, it is unlikely that you will have any tax implications. The UK will view the gift as a transfer of capital and, for the time being any way, the UK does not tax receipts of capital.
For instance, the receipt is not subject to income tax or capital gains tax in your hands.
The only exception might be where the donor’s estate was within the scope of UK IHT and he or she failed to survive the gift by 7 years. If this gift became chargeable to IHT then a liability might fall on you, the transferee.
In respect of the donor, from a UK perspective, a gift of cash (or any other asset other than certain UK assets, for example, UK real estate) will NOT create a CGT liability.
Donor’s tax position
This assumes he or she is non-UK domiciled as well as non-UK resident.
The donor might have to consider UK IHT if the cash he has gifted is within a UK bank account. However, this will be relevant if he survives the gift by 7 years in any event.
If the cash is in a UK bank account then the donor would also have the benefit of the nil rate band for IHT purposes in any event.
However, the UK tax system is complex, and we would recommend that you obtain formal and specific tax advice. Further, one should also consider any tax implications in the country that the donor is resident.
If you have any queries about a cash gift from a non-UK resident or regarding tax matters at all, then please do not hesitate to get in touch.
Cash gift from a non-UK resident was last updated on 5 August 2019
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