Gift tax (giving to a Spanish resident with UK bank account)

mbzon

Is a bit of a specific situation, but I am wondering if I would have any problems gifting 20,000GBP to my son, who is currently living in Spain, but still has a UK bank account. I am guessing he should have already closed this account as he is not a resident here, especially after brexit, but he does still have an active mailing address here and the bank haven't contacted him about anything yet. 

However apart from this, would there be any tax to be paid in the UK for doing this? From what I've read online there wouldn't be, as long as I don't die in the next 7 years, but it wasn't very clear information.



After gifting him here in the UK, he would then be transferring it into Spain, but I'm not sure if people on here would know anything about the tax situation there.

Oh, I am also a Spanish resident, but also still have my British residence, something that I also need to deregister from once I am able to travel to the UK again.

Jeremy535897

Wherever you are domiciled, giving your son £20,000 will not create a UK inheritance tax liability, whether on the gift or when you die, unless you have made gifts in excess of your nil rate band already (at least £325,000) within the last seven years. Even then, a liability could only arise on your death.

As you and your son are Spanish residents, I suggest you look into their gift tax rules rather than the UK ones.

mbzon

Oh ok, that wasn't mentioned on the article I read, in fact I thought it said 3000 per year, that accumulates from the previous 1 year, but maybe I misunderstood. Thanks for letting me know.

And yes I am trying to find out what the rules are in Spain, but do you think if the money changed hands in the UK, between UK banks, would it not come under the UK gift tax law? Also as I am assuming that the gift tax law applies to the giver not the receiver, and I am still a resident in the UK.

p00hsticks

There is no 'UK gift tax' law

Jeremy535897

The £3,000 is an annual exemption, and you can bring one year's exemption forward, so deducting up to £6,000 from the £20,000. As the chances of any UK inheritance tax being due are so small, it is unlikely to matter. The concept that there is a lifetime gift tax in the UK is a common misconception. Before 1986, in the era of capital transfer tax on lifetime gifts, the £3,000 annual exemption was quite important, but not now. (Apart from anything else, the £3,000 exemption remains unchanged from 1974, when it should now be over £35,000 due to inflation.)

You should be more concerned about the Spanish situation:

https://easytaxspain.com/inheritance-tax-and-gift-tax/