Can I be taxed on receiving a gift?

a small token of someone's appreciation ? are you an arms dealer ?

If it really is a gift and unconnected with your job (with certain exceptions, like small gift for suggesting a business idea is tax-free). Birthday gifts and those from generous relatives are examples.

Alec

I tell you what, give it all to me and you wont pay a penny in tax!!

Ta very much

I think that if the donor dies within a certain number of years (7 i think??) then there could be some IHT liability on the estate, but I don't think the recipient has a personal liability (i could be wrong on this). Not sure what happens though if the estate has no funds to pay the IHT because it's all been given away as similar "gifts" - not sure if the inland revenue could chase the recipients for the tax?

Probably worth asking someone with professional knowledge for that amount of money.

Have a look at

correct

They do have personal liability.

But only if they're unlucky enough for their gift to have happened at the "wrong" time. For instance, suppose the deceased had made gifts of £50k to each of 7 friends, one per year in each of the 7 years prior to death. In other words, in year 1 he gives £50k to A, in year 2 £50k to B, and so on, and then there was nothing left after blowing it all in Monte Carlo. Then recipients A, B, C, D, and E will not have any liability, but recipients F and G will, if there are no assets left in the estate from which to pay the £34.8k due. F will get stung for £14.8k, G for £20k. It is not the case that they will all have to pay £5k each (unless they so agree).

Is it up to the recipient of the gift to regularly check the obituaries column for each person who has given him any money over the last 7 years, and then contact the inland revenue to see if there is any liability?

Is it only *big* gifts that count, say 5k plus?

It's the executor's job to settle any IHT liability, and to draw up an inventory of the estate, including a list of PETs going back 7 years. I'm not sure if the executor has to act as tax collector, and contact the recipients, or whether merely telling the tax man whom to chase is enough.

Don't think so. Every little bit counts.

You need to read the Inland revenue's website on the subject. Gifts up to £3,000 in any one year are exempt, as are gifts made out of income. There are other exemptions as well. Other gifts are "Potentially Exempt Gifts".

When someone dies, the amount of any potentially exempt gifts made in the previous 7 years are added to their estate for the calculation of IHT. There is a complicated calculation related to how long ago the gift was made. They are part of the estate which is then exempt from IHT (unless they exceed the nil-rate band). The estate pays any IHT which is due, not the donee.

In message , Terry Harper writes

No. on a PET (its 'Transfer' not 'Gift') the beneficiary pays the IHT, NOT the estate.

In message , Ronald Raygun writes

Nah. It will be £6400 for F and £18800 for G.

You've forgotten the annual allowance of £3k (plus the unused allowance in the year before the gift to A). Are you sure you are Scottish?

And its the Donee who pays. For the estate to pay then the gifts would be 'grossed up' for tax purposes as though the donee received the net amount. Only if the donee doesnt pay up will the execs have top pay.

From

Depending on the precise circumstances different people can be liable for the payment of inheritance tax including

- the donor (in which case the amount of the gift will be increased by the amount of the tax),

- the donee, or

- legal personal representatives of the estate.

If there is any difficulty in obtaining payment from one source, we can look to the others for payment

but:

The whole chargeable value of the January 2001 gift exceeds the threshold, so the tax payable will be £38,800 (£97,000 at 40%).

The tax is payable by the person who received the gift.

This only applies where the total of the PETs, adjusted by Taper Relief, exceeds the threshold. If the PETs are less than the threshold, but push the estate into the IHT band, it is the estate which pays the IHT.

In message , Terry Harper writes

But then the tax is being paid on the residual estate, not on the PET. If tax is due on the PET then the donees pay it, as your snip says. It is only if tax is due on the residual estate AFTER the PET, that the execs pay it. Which was my point.

No I haven't. Didn't I mention he also gave £3k annually to the servants? It would only have served to confuse, so I didn't.

Ecossais? Moi?

No it's up to the executors of the deceased's estate to prepare alist of all gifts made over the last 7 years before the death. This gets sent to the Tax people.

No, there are various exemptions, but the lower limit is £250 to any one person in any one year.

Robert