Tax on monetary gifts

[Robert G]

If I were to inherit, say, �200,000, and wanted to give it all immediately to my daughter, is there any legal reason why I couldn't do this? (ie receive the money into my bank account and then write her a cheque).

Also, would my daughter have to declare the gift to the Inland Revenue? And would she have to pay any tax on it?

Also, am I right in thinking that if I lived for at least 7 more years the full amount would be exempt of Inheritance Tax?

[VillageVicar]

Robert: I'm not qualified to give you sound advice on the tax laws. However, you certainly are within your rights to issue a cheque to your daughter once those funds are resident within your account.

However, based on experience, I would encourage you to consider, prior to doing this, contacting a financial advisor towards discussing off-shore banking and long-term investment. I believe you will find this to be far more rewarding financially for your daughter, plus some added benefits relating to tax issues.

I would also suggest that if you do this, you do not seek advice and guidance from your own bank, but from an independent who is experienced in off-shore investment portfolios. There are varying degrees of risks, ranging from no-risk - low-risk to diverse combinations on up to 'spec' portfolios...which I would steer clear of for such a small amount.

I wish you every success

Fr Bill

[Hawkwalk]

there is no gift tax in the UK so you can give this money to your daughter and she does not have to declare it.

You are correct with the 7 year wait to be exempt from inheritance tax should your estate be over the minimum allowance.

[Robert G]

Thanks to both of you for your helpful answers. This confirms my own thoughts.

[johnny37]

As I always say I am not a legal expert but I believe you can also set up a deed of variation which means you can vary the deceased's will so that your inhertance (or part of it) can go to someone else. The money would not even touch your account.. See a solicitor.