Gifted 2 Million Pounds

[cleoval]

Hi my Cousin has been gifted 2 million pounds.Will she have to pay tax as she doesn't work and how much would she pay.? She will of course end her benefits.

[DTCwordfan]

depends on the nature of the gift and whether the donor is still alive - death duties exposure etc get reduced at 1/7th per year over the next 7 years, unless the donor has set up a condition that this will be settled from their estate..... take professional advice and to how to invest the dosh.

[Ellipsis]

How did the gift come about? Inheritance?

[barry1010]

If your cousin's benefits aren't means tested she can keep claiming them

[Buenchico]

There is no 'gift tax' in this country. So she won't have to pay a penny.

If the gift donor is still alive, their might be implications for any inheritance tax payable on her estate if she dies within 7 years. There might also be financial implications if the donor is going into a care home and has given away the money in order to avoid it being eaten up by her care costs but, as I've said, there's no 'gift tax' payable by your cousin and bona fide gifts (from whatever source) aren't classed as 'earnings' for the purposes of Income Tax.

[Ellipsis]

There would also be tax implications if it was an inheritance. Two million is above the inheritance tax threshold.

[Buenchico]

^^^ Agreed, Ellipsis, but it's the estate that pays the tax, not the recipient of any bequest.

[DTCwordfan]

as a matter of interest, what happens if it is loaned from the principal?

[cleoval]

Thank you all for your answers.

[piggynose]

cleoval, why no answers from you? is it very personal?