Receiving money as a gift from the UK
#1
Forum Regular
Thread Starter
Joined: Jul 2012
Posts: 86
Receiving money as a gift from the UK
Hi there,
Hoping someone can help answer my question. My dad recently sold his flat and is giving each of his kids £20k each. If he transfers this to my American bank account are there any tax implications? If so any advice on how to proceed with paying as little tax as possible?
Thank you for your help!
Annie
Hoping someone can help answer my question. My dad recently sold his flat and is giving each of his kids £20k each. If he transfers this to my American bank account are there any tax implications? If so any advice on how to proceed with paying as little tax as possible?
Thank you for your help!
Annie
#2
Re: Receiving money as a gift from the UK
Hi there,
Hoping someone can help answer my question. My dad recently sold his flat and is giving each of his kids £20k each. If he transfers this to my American bank account are there any tax implications? If so any advice on how to proceed with paying as little tax as possible?
Thank you for your help!
Annie
Hoping someone can help answer my question. My dad recently sold his flat and is giving each of his kids £20k each. If he transfers this to my American bank account are there any tax implications? If so any advice on how to proceed with paying as little tax as possible?
Thank you for your help!
Annie
However if the gift is more than $100,000 from a non resident, there is a reporting requirement (form 3520).
Gifts From A Foreign Person
#3
Re: Receiving money as a gift from the UK
plus - if you try and use that money for a home purchase in the US you may have to provide evidence of where it came from. (a letter from your father stating its a gift would likely be good enough - and can be done at the time you are going through the mortgage app - dont need it now). ie a mysterious 20k appearing would need explaining to get passed the Anti money laundering rules.
#4
Re: Receiving money as a gift from the UK
plus - if you try and use that money for a home purchase in the US you may have to provide evidence of where it came from. (a letter from your father stating its a gift would likely be good enough - and can be done at the time you are going through the mortgage app - dont need it now). ie a mysterious 20k appearing would need explaining to get passed the Anti money laundering rules.
The chances of any questions being asked about a typical $20k inbound wire transfer are minimal. However, it still a good idea to have it documented (as a gift) in case the issue were to come up in a future tax audit - also unlikely.
May or may not be an issue, but in the U.K., if the donor dies within 7 years the gift may count as part of the estate for Inheritance Tax purposes.
#5
Re: Receiving money as a gift from the UK
I experienced indirectly the same problem in the UK when I was selling my house there when first an Iranian would-be buyer and then a South African would-be buyer each were subject to the third degree over where the money came from. Neither passed muster with the respective banks they were trying to get a mortgage from.
#6
Forum Regular
Thread Starter
Joined: Jul 2012
Posts: 86
Re: Receiving money as a gift from the UK
Thank you everyone for your help! Really glad there are no tax obligations!
#7
Re: Receiving money as a gift from the UK
plus - if you try and use that money for a home purchase in the US you may have to provide evidence of where it came from. (a letter from your father stating its a gift would likely be good enough - and can be done at the time you are going through the mortgage app - dont need it now). ie a mysterious 20k appearing would need explaining to get passed the Anti money laundering rules.
The lender had a gift letter template that my Dad signed explaining it. Not a big deal.
#8
Re: Receiving money as a gift from the UK
Agreed, BUT, as MsElui said, try and use it for a house purchase and the questions will start, trust me, they will. My in-laws had their bank accounts reviewed in incredible detail when they were buying their current home, and questions were asked about two credits of (just) $1,800 each from Mrs P and me (they were loan repayments), and we had to sign statements as to why we had made the payments. .....
#9
Re: Receiving money as a gift from the UK
yes thats all i meant - the mortgage application process has to abide by aml regs and verify the source of any deposit. a standard gift letter (wording provided by the lender) will be the answer - so just be aware. if ANY house purchase is far down the line then likely not even an issue.
WE had to explain all kinds of entries on our bank account for our morgage earlier this year - none were issues we just had to waste time explaining them all.
WE had to explain all kinds of entries on our bank account for our morgage earlier this year - none were issues we just had to waste time explaining them all.