Great Uncle gifting gold coins to children - what documentation?

fisher66

My Uncle (who is in his 80s) wants to gift some gold sovereigns to my children (aged 10 and 13).  He has already bought some sovereigns and he has all the receipts.  He makes other cash gifts every January and already uses up the £3,000 annual IHT gift exemption on these.  The reason for gifting the sovereigns to the children is to try and avoid inheritance tax on these gifts.  We are aware that he would need to live another 7 years for these gifts to be fully outside his estate for IHT.

What sort of documentation do I need for these gifts?  He is intending to repeat them every year.  Do I need any documentation of the gift?  If so, what?  

To complicate matters further he wishes that we don't sell the sovereigns until the children are aged 20.  I am wary that putting a restriction like this on a "gift" would make it not a true gift so I have advised against this.  Instead, I am thinking of proposing that he gifts the coins to me instead and that I gift them to the children when they are 20.  Again, I am wondering how to document this.  Is there any point in him documenting the wish that the coins eventually go to the children?  Should he write a letter saying he gifts the coins to me and hopes that I will pass them to the children when they are 20 or should I just have him write a letter saying he gifts them to me without referencing the children at all.  He trusts me to give them to the children as he wishes so I am not sure there is any need to write it down.

I am conscious that I need to get this right to save any future problems with his estate.  Any thoughts on this would be appreciated.

Emmia

There is a risk that you predecease your uncle, those gold sovereigns (if they're in your name) then become part of your estate... 

Keep_pedalling

He should document all of his giving to make things easier for his executors. 

Brie

Are they actual gold sovereigns or just being sold as such.  There are companies that prey on the vulnerable offering stamps and coins for high prices that are actually worth very little and for which there is no real market.  No real fraud involved just very very very high mark up.   So if they have little value and no possibility of being sold then there's really no problem if he gives them to you or your children.  Just a shame that he's being conned a bit.

HobgoblinBT

Why dont you just accept the gift and put them away safely with a letter from uncle explaining about the gift to be received at age 20,  then present them to each child on their 20th birthday together with the letter(s) from their uncle. If you need any documentation you can either ask for the bill of sale for the coins or if you would rather not, just google the price of the exact coin when the gift is received, screen print and keep it with the coins  If he is still here on their respective 20th birthdays they can thank him in person, if not they have the letters from him and the nice gift at an age where it will be very welcome.  

silvercar

HobgoblinBT said:

Why dont you just accept the gift and put them away safely with a letter from uncle explaining about the gift to be received at age 20,  then present them to each child on their 20th birthday together with the letter(s) from their uncle.

That is what I would do. Thank uncle, put them away and forget about them.

If your children want to sell them, there are plenty of legitimate places that buy gold coins, all they require is ID of the person selling, they are not interested in the source of the coins. (I know because I have done this). 

doodling

Hi,

As others have said, the OP needs no documentation at all

The uncle's executors would be helped if the gifts were documented so that they can ensure the right IHT is paid, otherwise they .might end up paying too little (or too much!) tax.  Unless the uncle is paying for these gifts by untraceable cash then the executors will need to deal with working out what the cash withdrawals / payments were that paid for the gifts.

fisher66

doodling said:

Hi,

As others have said, the OP needs no documentation at all

The uncle's executors would be helped if the gifts were documented so that they can ensure the right IHT is paid, otherwise they .might end up paying too little (or too much!) tax.  Unless the uncle is paying for these gifts by untraceable cash then the executors will need to deal with working out what the cash withdrawals / payments were that paid for the gifts.

Thanks. I am also the executor of his will so I will have the documentation of the gifts when the time comes but I will also ensure he keeps a record of the gifts with his copy of the will just in case something happens to me first. 

fisher66

Brie said:

Are they actual gold sovereigns or just being sold as such.  There are companies that prey on the vulnerable offering stamps and coins for high prices that are actually worth very little and for which there is no real market.  No real fraud involved just very very very high mark up.   So if they have little value and no possibility of being sold then there's really no problem if he gives them to you or your children.  Just a shame that he's being conned a bit.

Yes. I believe they are actual gold sovereigns. I know he bought the first ones from the royal mint. He's pretty clued up on stock market investments so I'd be surprised if he'd been taken in.

fisher66

silvercar said:

HobgoblinBT said:

Why dont you just accept the gift and put them away safely with a letter from uncle explaining about the gift to be received at age 20,  then present them to each child on their 20th birthday together with the letter(s) from their uncle.

That is what I would do. Thank uncle, put them away and forget about them.

If your children want to sell them, there are plenty of legitimate places that buy gold coins, all they require is ID of the person selling, they are not interested in the source of the coins. (I know because I have done this). 

Thanks for this information - very good to know.

Rusty190

May I ask a possibly naive question.... how would HMRC know that Uncle had bought any gold sovereigns - presuming that he's buying a couple here and there and not purchasing the UK's gold reserves?