Uk resident making a gift to his son (French resident). Tax question

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steve321
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Uk resident making a gift to his son (French resident). Tax question

Post by steve321 »

I am thinking of gifting money to my son, who lives in France.
I know the rules in the UK (if you live for more than 7 years after making the gift, it won't be taxed).
However, in France the person receiving the gift is taxed above a certain threshold (and the gift would be much larger).
In the scenario I am considering, since the person making the gift is a UK resident and the person receiving it is a French resident, I don't know whether both rules will be applied. In other words does that mean that the beneficiary will be taxed in France and that there will be a tax in the UK if the person making the gift dies within 7 years? I haven't been able to find any information on international conventions on gifting money so I am confused.
Can anyone help?
Success does not bring happiness. In fact, happiness IS success. | 'There are only two tragedies in life: one is not getting what one wants, and the other is getting it.' Oscar Wilde
ivk5
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Re: Uk resident making a gift to his son (French resident). Tax question

Post by ivk5 »

I don’t have first hand experience with this scenario but this might help? https://www.spectrum-ifa.com/the-gift-of-giving/
Gifts from a UK resident to a French resident – UK tax applies
If you receive gifts from a UK resident, such gifts are generally subject to UK tax rules. However, if the recipient has lived in France for at least six of the ten tax years preceding the year in which the gift is received, French tax rules will apply. ... If a double tax situation were to arise then the tax paid in the UK would be deducted from any tax payable in France. French tax is also payable if a UK resident gifts an asset that is situated in France.
(Edited to add quote)
UKFred
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Re: Uk resident making a gift to his son (French resident). Tax question

Post by UKFred »

I am going purely by logic and not knowledge - so I am probably completely wrong! Given that it is a gift tax on the French side and inheritance tax on the UK side, I suspect that both will be applied. It is possible that dual taxation treaty relief might be available (though unlikely) if U.K. inheritance tax becomes relevant and proper records are kept.
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steve321
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Re: Uk resident making a gift to his son (French resident). Tax question

Post by steve321 »

UKFred wrote: Tue Sep 15, 2020 3:21 am I am going purely by logic and not knowledge - so I am probably completely wrong! Given that it is a gift tax on the French side and inheritance tax on the UK side, I suspect that both will be applied. It is possible that dual taxation treaty relief might be available (though unlikely) if U.K. inheritance tax becomes relevant and proper records are kept.
Yes that's what I was worried about. And I also fear that taxation in France will apply to inheritance when I die if my son is still there, because in the UK inheritance tax is paid on my estate but in France it is the recipient who is liable to pay inheritance tax, so if the heir will be living in France they might have to pay extra tax.
Success does not bring happiness. In fact, happiness IS success. | 'There are only two tragedies in life: one is not getting what one wants, and the other is getting it.' Oscar Wilde
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steve321
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Re: Uk resident making a gift to his son (French resident). Tax question

Post by steve321 »

ivk5 wrote: Tue Sep 15, 2020 3:09 am I don’t have first hand experience with this scenario but this might help? https://www.spectrum-ifa.com/the-gift-of-giving/
Gifts from a UK resident to a French resident – UK tax applies
If you receive gifts from a UK resident, such gifts are generally subject to UK tax rules. However, if the recipient has lived in France for at least six of the ten tax years preceding the year in which the gift is received, French tax rules will apply. ... If a double tax situation were to arise then the tax paid in the UK would be deducted from any tax payable in France. French tax is also payable if a UK resident gifts an asset that is situated in France.
(Edited to add quote)
Thank you for your help, yes this is quite relevant and clearly explained.
Success does not bring happiness. In fact, happiness IS success. | 'There are only two tragedies in life: one is not getting what one wants, and the other is getting it.' Oscar Wilde
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