Film, Media & TV2 mins ago
tax on receiving gift money
Am I liable to pay tax on this gift?
Will he be taxed for giving me this money?
Answers
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For more on marking an answer as the "Best Answer", please visit our FAQ.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.