Receiving cash gifts from U.K.?

Question

My parents live in the U.K., I live in the U.S. They want to gift cash from their estate to me, wife and kids.

As they are not U.S. tax payers, the gift exclusion doens't matter (correct?), but would I incur any tax liability for out of country gifts? Thanks!

Answer 1

The Gift Tax does apply, but they could use their lifetime exclusion to gift you up to $1 million without any meaningful tax consequences. If they don't file a Gift Tax return, you could be required to pay the Gift Tax yourself.

Answer 2

the US estate & gift system does not apply. An reporting requirement does exist for an individual receiving gifts from a non-US person.

If in 2006 you received more than $12,760 in gifts from a foreign business entity, you'll need to disclose that on Form 3520 Part IV.If you received more than $100,000 from a foreign individual, you'll need to disclose that separately on the same form.

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Any tax advice included in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency.

Answer 3

IRS doesn't have to know everything.