Large sum of money as gift, legality of transfer, taxes, etc

[mindutopia]

I’m not sure if this is the best place to ask on MN but thought I’d start here and maybe someone can give some advice before we start trying to figure out how to do this ourselves.

I wanted to ask if anyone had any advice about transferring a large amount of money internationally (into the U.K.), the best (obviously legal!) way to do it, and what we should be aware of in terms of taxes, etc.

My mum and stepdad live permanently overseas (no home in the UK, no accounts here, etc). We are looking to buy a house next year and it’s always been the plan that they would like to contribute to our deposit so that we could buy somewhere with an annexe or holiday cottage or even a barn we could convert for them. The intention is that so that once they retire next year they could come stay with us for a few months every year but have their own space. I’m an only child and my dc are their only grandchildren, so they want to essentially gift us our inheritance now so that we can invest in a bigger property where they can stay when they’re here, possibly for an extended period of time when they are older and need care.

So we need to get this money (will probably be about £100,000, I know we are very fortunate!) to the UK in the best legal way possible where we don’t have to pay extortionate transfer fees (they don’t maintain a UK bank account). It will be a gift. They won’t be putting their names on the mortgage. Do I need to pay taxes on this? Or report it to HMRC for any reason? Or is it just as simple as paying a transfer fee and sending it?

Banks do this all the time. Why would they not speak to their bank?

You may well get some helpful tips on here, but I would strongly recommend that you obtain professional advice on the tax and legal issues and make sure the gift is properly documented. With that amount of cash, you really don't want any surprises or disputes down the line.

Are they in the EU, there are a lot of firms who do this at better rates than the banks, I don't have any knowledge of moving money around outside the EU. You could try reposting this in Money. My brother and I moved considerably more from our French account when we sold a house in France, there weren't any problems (CGT aside) and I can't recall having to notify any official body in regards to it.

I'm in a similar position. My parents want to help me buy a house here but live abroad and don't want either of us to have to pay taxes transfering it.

For transferring use TransferWise or similar, not a bank, banks will say they charge no fees but give a terrible exchange rate. Can transfer anywhere not just EU

(it's very easy btw). Re taxes I'm not sure - pretty sure from a UK point of view you would pay nothing unless your parents die in the next 7 years then you could be liable for iht.

You need proper advice from an accountant or tax specialist who is familiar with residency and domicile and also how these interact with inheritance matters. I wouldn’t suggest you rely on the internet for this one.

1. Check the country they are transferring from allows it by law - some countries have exchange control restrictions.
2. Ensure your parents can prove source of their funds as your English solicitor when you buy the house may well want that proof eg laundered drug money or their life's savings etc etc.
3. it is not very hard to transfe rmoney abroad. When I bought a property abroad I just went into my local bank branch with ID and the account numbers and they did it - sometimes it takes a while to go through - days , sometimes 2 weeks if via 2 banks but it is done all the time. Be 100% sure of the account numbers and if not sure do a trial tarnsfer first. £100k is not really very much. Can they not just do a bank transfer to you every month for a year? I pay two people abroad every month for work from my business and just do it by a transfer from my bank to that person . I pay in sterling.
4. I do not know inheritance tax laws in their home state - they need to check and they may have gift taxes where they are taxed too hence why people above are saying take advice. Assuming none then if they are taxed in the UK and then die here within 7 years there may be inheritance tax to be paid on the gift and the UK IHT rules may change in the next few years to alter that period too.
5. When you buy the property the solicitors will ask for proof of funds and want written confirmation signed by the parents it was a gift.

It probably is as simple as doing the transfer. I would not go for the cheapest way of transfer however. A few extra pounds saved over a risky transfer for a sum as large as £100k sounds a bit risky to me. Go with a good bank. Probably your parents just go into their local bank and ask to do a transfer to your account. If it's only £100k can they not just transfer you £9000 a month for a year and a bit by bank transfer? They also need to understand that if you are married and break up your other half may be entitled to at least half of this money. If they make it a loan that is not so so it is quite a decision they have to take on this one.

Sorry! Wrong thread!