Large financial gift vs tax

[CAPP0]

In the scenario where Person A has, let's say, £5m in the bank, and decides to gift, let's say, £75k to Person B, who is an acquaintance of theirs, not family, and not likely to be a beneficiary of Person A's estate (which in the normal run of things would be some 20-30 years hence anyway), can anyone advise what Person B's tax liability on the gifted amount would be? Assume that Person B is employed and pays tax via PAYE and is a higher-rate taxpayer.

Thanks.

[anonymous-user]

Nothing.

[bompey]

Nothing, provided person A lives 7 years otherwise there are inheritance tax implications.

[anonymous-user]

bompey said:

Nothing, provided person A lives 7 years otherwise there are inheritance tax implications.

I think any liabilities would lie with the estate, not with the person receiving the gift.

[CAPP0]

Thanks for that chaps, I genuinely didn't know the answer.

[uknick]

desolate said:

I think any liabilities would lie with the estate, not with the person receiving the gift.

Not necessarily; if the estate doesn't have the assets to cover the IHT the gift beneficiary is liable for the IHT on the gift.

If you think about it, that makes sense otherwise somebody could give away their whole estate just before death and leave nothing to pay the IHT due.

[bompey]

It's not a liability of the estate, it's an asset that was given away. If person A dies within 7 years the authorities will expect IHT to be paid on it by the estate before probate can be granted.

[rfisher]

Call me hun.

[JulianPH]

rfisher said:

Call me hun.

Hun.

Does that help?

[rfisher]

JulianPH said:

rfisher said:

Call me hun.

Hun.

Does that help?

Known him for years.

Bestest mates we are.

It's that 150mil lottery winner geezer isn't it?

[rfisher]

Now call me a cab ....

[Sheepshanks]

bompey said:

Nothing, provided person A lives 7 years otherwise there are inheritance tax implications.

Also assuming person B isn't employed by person A!


It's odd how people think gifts might be taxable - it comes up on here quite regularly. I recall one poster being furious that a mate of his wasn't paying tax on an allowance he was being given by his parents.

[CAPP0]

Sheepshanks said:

Also assuming person B isn't employed by person

What about if Person A and Person B had worked for the same company but Person A retired and subsequently gifted Person B from his private funds?

[anonymous-user]

CAPP0 said:

What about if Person A and Person B had worked for the same company but Person A retired and subsequently gifted Person B from his private funds?

They would have to be able to demonstrate it wasn't in any way connected with a reward for their work.