Cash gift from parents - most tax efficient way?

colgate_2

My parents want to gift 100,000 pounds each to myself and my sister after the sale of their house. We are both in slightly different situations. I 'm living in the US for a couple of years (and liable for US tax) and my sister lives in the UK.
I wonder is somebody could please advise the most tax efficient way of doing this for both of us.
If it makes any difference both of us are married with small children.
Thanks in advance.

EdInvestor

There's no tax payable on gifts here. If your parents survive for 7 years after giving you the money the gifts will not attract inheritance tax (assuming their total estate is over the limit.)

dzug

You need to get separate advice on the US rules - I have a hazy memory that such gifts are totted up over a lifetime, not annually - so probably no tax there either.

Murdina

If you have no plans to use the money, they could gift some direct to the children and that way no IHT were you to die (at least from the UK perspective) and be liable to IHT (ie you skip a generation). You would of course just have to invest it for them for when they are older, unless you wanted to go in for trusts, which are hideously complex.

If your parents were ever to need your help in the future and e.g. you or your sister bought them a house to live in, that could be caught by the income tax charge on pre-owned assets. Just a thought in case - since you say they are selling their house.