Cash gift from in-laws overseas

Eggtemple

Good morning

My in-laws who live in China would like to give us money to contribute to our children's school fees. They want to pay £6k each year for both of our daughters (£12k total). They would like to give us as much as possible as well to help with our mortgage through bank transfer (without us being taxed on it).

We are unsure if we will be taxed or not? We have done a little digging and have seen that they can gift up to £3,000 a year each to us tax. Could her dad give me £3k and my wife £3k and then my mother in law the same? Is there a way they could gift us more?

With the new tax year looming we thought it would be best to try and sort it out asap.

We can't really find much info on in-laws from abroad gifting cash. If anyone can advise us it would be greatly appreciated.

Kind regards
Mike

Keep_pedalling

There is no gift tax in the UK so you have no tax liability. The £3000 allowance is not a limitation, it is just the amount you can give that you don’t have to live for 7 years to take out of IHT calculations.

As you parents live in China the 7 year rule is irrelevant, but they should check any implications of these gifts under China’s tax rules.

xylophone

Your in-laws are Chinese nationals and tax resident in China?

Or UK citizens resident in China?

They have no assets in the UK?

https://www.gov.uk/inheritance-tax/when-someone-living-outside-the-uk-dies

Are there any Chinese regulations that would have any bearing on their proposals?

Otherwise, from the point of view of your tax position, you do not have to pay tax on these monetary gifts.

You may wish to advise your bank that you are receiving money from non uk bank accounts if this will be the case.

Or do they have UK bank accounts from which the gifts will be made?

Eggtemple

Thank you for your reply.

They are Chinese nationals living in China and have zero UK assets.

So am I correct in thinking that they could theoretically gift us as much as they would like without us being liable?

I will get my wife to look into China's tax policies.

Kind regards

xylophone

theoretically gift us as much as they would like without us being liable?

http://taxsummaries.pwc.com/frmTerritoryPrintPreview?openForm&countryName=China~%20People~~~s%20Republic%20of&Type=Individual

According to the above

Inheritance, estate, and gift taxes
At present, there are no inheritance, estate, or gift taxes in China.


But your in-laws would do well to check.

You will be receiving monetary gifts from non residents with no UK assets.

Eggtemple

Xylophone - many thanks. You have been a great help.