Share this content

Money gifted

What are the tax implications if any on cash gifts

Didn't find your answer?

Hi all,

I know what the potential tax implications are for the person giving the cash gift and the annual allowances etc. 

But can I please confirm if my understanding is correct that for the person recieveing it, as it is a cash gift, there are no tax implications. 

Thanks in advance. 

Replies (11)

Please login or register to join the discussion.

avatar
By Paul Crowley
23rd Jun 2022 10:49

If tax was payable on gifts, then most of us would dislike Christmas and birthdays.
BUT
If the gift is from an aged relative that is looking to avoid care costs, it could be repayable in full.

Thanks (0)
Replying to Paul Crowley:
avatar
By David Ex
23rd Jun 2022 11:15

Paul Crowley wrote:

If tax was payable on gifts, then most of us would dislike Christmas and birthdays.
BUT
If the gift is from an aged relative that is looking to avoid care costs, it could be repayable in full.

And, as always, there may be more to the “gift” than meets the eye. Just because it’s described by a client as a gift, doesn’t mean it’s a gift legally or for tax purposes. So gifts to employees, for example, need to be scrutinised.

Thanks (2)
Replying to David Ex:
avatar
By Paul Crowley
23rd Jun 2022 11:42

A prior thread referred to gifts
Yesterday I gave £10 to a waitress. She probably needs to declare it

Agree entirely, circumstances of 'gift' determine the tax position and any other consequences
The OP's accountant would be asking what exactly are the circumstances of the gift before giving an opinion

Thanks (0)
avatar
By Tax Dragon
23rd Jun 2022 11:45

There are never "no tax implications" (at the very least, the money received is now part of the recipient's IHT Estate); what other implications there may be depends. Trivial example: when I say "keep the change" to a tradesperson, I make a cash gift. (Generally these days it's only taxi drivers and Big Issue sellers - everything else is contactless.) That cash gift is taxable as income of the tradesperson.

And those are genuine gifts I'm making. What kind are you talking about?

Thanks (1)
Replying to Tax Dragon:
avatar
By Tax Dragon
23rd Jun 2022 11:46

Crossed in the posting with comments that already make these points. Good stuff David and Paul.

Thanks (1)
Replying to Tax Dragon:
avatar
By insolventnl
23rd Jun 2022 14:20

Its funds they received from their parent. It is less than 10k; so yes the mother exceeds the annual 3k allowance per year but just am unsure on the implications, if any for the recipient.

Thanks (0)
Replying to insolventnl:
avatar
By DKB-Sheffield
23rd Jun 2022 14:45

Sorry for hijacking TD but I was about to post before your previous excellent response (and those of others).

@ OP
The gift (assuming it IS a gift) will create a PET.

Were the PET to 'fail' there may be tax implications on the estate.

Where there is an existing CLT, there may be further implications to.

If the donee is the beneficiary of the estate, there would be 'indirect' tax implications (insofar as IHT would effectively reduce the distributable value of the estate).

If you're not an accountant/ tax adviser, or have limited experience in IHT, you (or the client) should seek professional advice.

IMHO, IHT is one of the most overlooked, least understood (believe me, I'm no expert - TD is), and potentially the most costly, of all taxes. Effective IHT planning is essential and certainly not childsplay!

Please note, the above is a complete simplification, and includes no references to legislation, or potential further implications that may be relevant to the specific case in hand!

Where I am in complete agreement with TD, "there are never 'no tax consequences'" when considering gifts!

N.B. Post started at 14:30 so I apologise if I've duplicated comments posted by those with faster keyboard skills (I'm using my phone)!

Thanks (0)
Caroline
By accountantccole
23rd Jun 2022 11:51

Potential tax liability if the recipient is based in France .... unlikely scenario but thought I'd chuck another angle in

Thanks (3)
Replying to accountantccole:
avatar
By Paul Crowley
23rd Jun 2022 12:18

Really interested
How does a gift become taxable in France? Does donor get tax relief?

In Japan I am aware that gifts for specific occasions are culturally expected to be valued and 30% spent on a gift back to original donor
Me, rather not have the gift is I am expected to comply. Sheldon had the same problem with a gift from Penny in the Big Bang Theory

Thanks (2)
Replying to Paul Crowley:
Caroline
By accountantccole
24th Jun 2022 09:28

https://www.french-property.com/guides/france/finance-taxation/taxation/... gives a broad summary. Not had to look into it any depth but seems to be a mine field!

Thanks (1)
Replying to accountantccole:
avatar
By Paul Crowley
24th Jun 2022 09:46

Much appreciated
Christmas is saved

Thanks (0)
Share this content