Malcolm Finney takes a look at whether cash gifts are effective for inheritance tax purposes.
Inheritance tax (IHT) is, in principle, a tax charged on an individual’s estate on death and on lifetime gifts made by individuals. The charge applies to gifts of cash, but such gifts offer the least complicated way of giving (i.e., unlike gifts of, say, business property or agricultural property, there are no conditions to be satisfied on making gifts of cash).
Gifts of foreign currency
Gifts of cash in foreign currency are subject to IHT converted into sterling at the rate of exchange applicable at the date of making the gift.
Excluded property (i.e., property not subject to IHT; IHTA 1984, s 157) extends (in certain circumstances) to non-sterling (i.e., foreign currency) bank accounts, but not foreign currency held in cash.
