Donation from parents (EU) to children (UK)

Robert135

Hey!

First time poster  

My understanding of the UK inheritance law is that:

- donations from parents to children will be taxed, unless the donor lives for another 7 years (rate from 8% to 40% based on how long the donor lives after the donation).

- the first £325k of the estate are exempt (all donations combined within the last 7 years).

- 3k annual exemption (which are likely irrelevant in this case)   [?]

As a UK resident, do I need to do something at the time of the donation (or just keep a record of it)?   [?]

Where my parents live, it's possible to pay a 3% tax at the time of the donation (no inheritance tax is then due even if the donor dies shortly after). As I live in the UK, I presume this is not an option for me.   [?]

Any thoughts would be greatly appreciated 

Thanks!

Hoenir

Your parents are not subject to UK IHT legislation. 

Robert135

Hoenir said:

Your parents are not subject to UK IHT legislation. 

Yes, that's true. But isn't the tax paid by the beneficiary. In this case, me, resident in the UK?

mebu60

Robert135 said:

Hoenir said:

Your parents are not subject to UK IHT legislation. 

Yes, that's true. But isn't the tax paid by the beneficiary. In this case, me, resident in the UK?

Usually it would be paid by the deceased's estate. 

Robert135

mebu60 said:

Robert135 said:

Hoenir said:

Your parents are not subject to UK IHT legislation. 

Yes, that's true. But isn't the tax paid by the beneficiary. In this case, me, resident in the UK?

Usually it would be paid by the deceased's estate. 

Good to know!

The donation will be officially recorded on my parent's side. All children are beneficiary. My siblings live in the EU and would rather pay 3% (donation) now rather than taking a gamble (inheritance).

Anything that needs doing on my side?

mebu60

Robert135 said:

Anything that needs doing on my side?

Spend it! Wisely or unwisely or a bit of both.

Robert135

mebu60 said:

Robert135 said:

Anything that needs doing on my side?

Spend it! Wisely or unwisely or a bit of both.

Thanks, I like the sound of that! 

But I have no idea yet whether I'll get £1k or £100k 

_Penny_Dreadful

Robert135 said:

Hoenir said:

Your parents are not subject to UK IHT legislation. 

Yes, that's true. But isn't the tax paid by the beneficiary. In this case, me, resident in the UK?

Which tax?  Your parents do not live in the UK, when they pass their estate will not be subject to UK IHT legislation.  The fact that a beneficiary of their estate lives in the UK does not mean that any part of their estate will be subject to UK IHT. 

Robert135

_Penny_Dreadful said:

Robert135 said:

Hoenir said:

Your parents are not subject to UK IHT legislation. 

Yes, that's true. But isn't the tax paid by the beneficiary. In this case, me, resident in the UK?

Which tax?  Your parents do not live in the UK, when they pass their estate will not be subject to UK IHT legislation.  The fact that a beneficiary of their estate lives in the UK does not mean that any part of their estate will be subject to UK IHT. 

Thanks for confirming this too! It actually makes sense (that it won't be subject to UK IHT)😁 I panicked!