tax on receiving gift money

[lynneg]

I live in the UK and am a british citizen. A friend ho is also British and living int he UK wishes to give me a gift of eight thousand pounds.
Am I liable to pay tax on this gift?
Will he be taxed for giving me this money?

[kempie]

No immediate tax liability would arise, but if your friend were to die within 7 years his estate may well have to pay Inheritance Tax (IHT) on this amount since �8000 is more than the potentially exempt transfer (PET) limits.

http://www.hmrc.gov.uk/leaflets/iht2.htm

http://www.forumwealth.com/accsol/the_inheritance_tax_exemptions.html

Provided your friend has not 'gifted' to anybody in the last 18 months I believe that he could remove future tax liability on this gift if he were to split the amount into a �6000 gift in this tax year (which includes �3000 carried over from the last tax year) and the remaining �2000 in the next tax year.

All of this needs to be confirmed by a tax expert.