How to accept a cash gift from overseas

leg1t

I am a UK resident. A french resident wishes to gift me just under 30k euros. Their money is legitimately earned and it is kept in the bank however in France they say they must pay a massive gift tax - because of this they only wish to gift in cash. This is something most of us can understand, especially at a rate of more than 60% they say, and even though it is evasion (in France in this case) - that is not me - I do NOT wish to evade tax in the UK - I simply wish to know where I stand and what to with it BEFORE accepting.

As far as I understand it, in the UK, gift tax is not payable by the recipient. I think this is on the basis that the tax burden is on the donor however what happens when the donor is not UK tax resident? I wouldn't even wish to breach the entry regulations of importing more than 10,000 pounds - I'd take more than one trip - but it's a question of what to do with it without feeling like (or being looked at like) a money launderer! One reads about depositing small sums in a variety of accounts over a period of time - there are strange activity triggers for that aren't there and surely that looks bad when they later question you? What happens if you're up front about it - open a euro bank account and make a 10k cash deposit? Surely I need to justify the source but when the UK bank verifies the legitimacy back in France the paper trail is made and my benefactor is up a certain creek with the authorities! We can all keep it under the mattress but I wish to keep it safely and use it officially.

Any suggestions or insight please..

bryanb

This is clearly not straightforward, I shall be in France soon and will happily take away the problem (in cash)
Alternatively open a French account yourself and transfer, doesn't help the donor though (If such people really exist)

leg1t

bryanb wrote: »

This is clearly not straightforward, I shall be in France soon and will happily take away the problem (in cash)

Thanks - dilemma resolved - I'll leave it under the bench next to the train station, okay?

bryanb wrote: »

Alternatively open a French account yourself and transfer, doesn't help the donor though (If such people really exist)

This was a consideration however depositing cash in French banks, especially for a non-tax resident account, is not so easy - they ask for a justicatif.

Such people do exisit, and usually there are reasons for acts of generosity. I have omitted the personal history to keep things to the point but I'll be happy to share the story at the handover.

tyllwyd

Is the french resident a relative of yours?

(Edited to say - sorry, having read your post above it looks as if it is not that straightforward - I just asked because having done a quick google search that might affect the tax situation)

bryanb

Perhaps a Euro account in a less fussy EU country?

leg1t

tyllwyd wrote: »

Is the french resident a relative of yours?

This doesn't apply to me but an interesting point for french family is that parents can give quite substantial lifetime gifts tax free. A friend's parent gifted her and her siblings the house and when she died a couple of years later there was no tax to pay. I think the amount is 150,000 euros per child every six years. Maybe it's not so interesting to us in the UK but I found it quite surprising given the burden of tax in France. Maybe I should get adopted! Sorry folks, joke..

leg1t

bryanb wrote: »

Perhaps a Euro account in a less fussy EU country?

It's not a bad sugestion however which country?? Would it not be similar in other countries? Would they not be against foreigners depositing cash in their country - it nearly always suggests something suspect within their own borders.

Switzerland?

bryanb

I have had an account in Greece with no questions, But for ease of transport I'd check out Spain. Switzerland is not EU.

kalaika

leg1t wrote: »

This doesn't apply to me but an interesting point for french family is that parents can give quite substantial lifetime gifts tax free. A friend's parent gifted her and her siblings the house and when she died a couple of years later there was no tax to pay. I think the amount is 150,000 euros per child every six years. Maybe it's not so interesting to us in the UK but I found it quite surprising given the burden of tax in France. Maybe I should get adopted! Sorry folks, joke..

This is going off topic a little, but I heard from a friend living in France that, on death, houses are automatically passed to the deceased's next of kin and you cannot write in a will for it to go to anyone else. May also explain why your friend gifted the house to all of their children whilst still alive. Apart from saving tax it made sure the property went to all of them. (Caveat - I have not researched this point, so it may not be entirely true, but it's just something I was told and thought it was quite interesting)

Anyway, back on topic...

leg1t wrote: »

...and even though it is evasion (in France in this case) - that is not me - I do NOT wish to evade tax in the UK - I simply wish to know where I stand and what to with it BEFORE accepting.

Even though you may not be the one who is actually doing the tax evasion, you may find that you are deemed to be complicit in it. If you are found to be aiding and abbetting the evasion (or whatever the equivalent is in France) then you may find yourself in hot water. (I'm not saying you will get into trouble, but is just something that you may need to consider.)

leg1t

bryanb wrote: »

Switzerland is not EU.

True but I think you can set up euro accounts. I do think it's like anywhere else - one needs to show proof of origin of funds - not itself a problem but since Switzerland are supposedly complying with France's requests to share bank info ( ibtimes.com/articles/20090827/france-swiss-bankinformation.htm) the question is would they give up some paperwork on a french resident's dealings with a UK tax resident account holder?!

bryanb

leg1t wrote: »

True but I think you can set up euro accounts. I do think it's like anywhere else - one needs to show proof of origin of funds - not itself a problem but since Switzerland are supposedly complying with France's requests to share bank info ( ibtimes.com/articles/20090827/france-swiss-bankinformation.htm) the question is would they give up some paperwork on a french resident's dealings with a UK tax resident account holder?!

Sorry, I think I'm misunderstanding you, I thought this was to be a gift in cash (Used notes etc) therefore no paper trail.