Questions on CGT and Gifts

Just to make them aware, and force you to check whether the gain might be enough to generate a tax liability. The AEA is about £10k just now, and a disposal worth more than £40k may well (but won't necessarily) involve a gain in excess of £10k.

Of course a gain in excess of £10k would (unless neutralised by losses elsewhere) still generate tax liability (and thus a duty to report) even if the proceeds are less than £40k.

No.

No. Gifts are never taxable on the recipient, but may be taxable on the donor if the disposal involves realising a capital gain (which cannot be the case with cash) or if the donor dies within 7 years.

I thought such gifts were taxable on the recipient if the donor's estate wasn't large enough to pay (all) the tax due.

No, they aren't. The donor's estate is always large enough to pay all the tax due, because the assets "gifted" to the recipient technically remain part of the donor's estate.

So even if the tax man can claw back part of the "gift" to cover the tax due, that doesn't make it taxable on the recipient. It's still the donor (or the donor's estate) that's being taxed.

I had meant to add a rider to that effect to my previous post, but then decided not to bother. I guess that was a mistake. :-)

No, they aren't. The donor's estate is always large enough to pay all the tax due, because the assets "gifted" to the recipient technically remain part of the donor's estate.

So even if the tax man can claw back part of the "gift" to cover the tax due, that doesn't make it taxable on the recipient. It's still the donor (or the donor's estate) that's being taxed.

I had meant to add a rider to that effect to my previous post, but then decided not to bother. I guess that was a mistake. :-)

Thanks a lot guys for your posts. They're most helpful!

Regards, TG