To send or receive a large monetary gift internationally, convert it through a currency specialist who can fix the rate and handle the source-of-funds checks, rather than relying on a bank. On the tax: the UK has no gift tax, but a large gift can carry Inheritance Tax implications for the giver under the seven-year rule.
A large gift across borders — a parent helping a child buy abroad, or a relative overseas sending money into the UK — raises three practical questions: how to move the money well, what checks to expect, and what the tax position is. This guide takes them in turn. It is not tax guidance; the tax itself is a matter for an accountant. What we can help with is the currency and the transfer.
The key point: the UK has no standalone gift tax. Whether a large gift is taxable is mostly a question of Inheritance Tax, which depends on the giver’s circumstances — not on the person receiving the money.
Who this guide is for. Anyone sending or receiving a substantial monetary gift across borders — helping family with a house deposit, supporting relatives abroad, or receiving a gift from overseas into the UK.
The currency side: a large one-off conversion
A cross-border gift usually means converting a large sum once. On a six-figure amount, the rate on the day is real money — a one-cent move on £200,000 converted to euros is around €2,000. If the gift is for a specific purpose with a deadline, such as a property completion, a forward contract can fix the rate in advance so the recipient gets a known amount. Whether to fix or convert at spot depends on timing and your view of the market — see whether to lock in a rate or wait and our guide to large international transfers.
Source of funds: expect checks on a large gift
Large international gifts trigger source-of-funds and anti-money-laundering checks, by both banks and regulated currency brokers. This is normal and required: you should expect to evidence where the money came from and the purpose of the gift — often a short gift letter from the giver and proof of the underlying funds. A regulated specialist carries out these checks as standard, which can make a large gift move more smoothly than through a bank that flags and freezes an unexpected six-figure transfer. Our guides on whether currency brokers are safe and brokers offering safeguarded funds and forward contracts explain how client money is protected.
The UK tax position on gifts
In the UK, a person receiving a genuine gift does not pay income tax on the gift itself, although any income later generated by it — interest, rent, dividends — is taxable. The tax question sits with the giver, under Inheritance Tax. Gifts to individuals above the available exemptions are treated as Potentially Exempt Transfers: they become fully free of Inheritance Tax if the giver survives seven years from the date of the gift. If the giver dies within seven years, the gift is added back into their estate, and taper relief can reduce the tax rate — not the value of the gift — on a sliding scale between years three and seven, and only where cumulative gifts exceed the £325,000 nil-rate band.
Several gifts are exempt regardless of the seven-year rule: a £3,000 annual exemption (you can carry forward one unused year, so up to £6,000), small gifts of up to £250 per person each year, wedding gifts (£5,000 to a child, £2,500 to a grandchild, £1,000 to anyone else), regular gifts out of surplus income, and gifts to a spouse, civil partner or charity. Gifts generally need not be reported to HMRC unless Inheritance Tax is due, but keeping a dated record is sensible. This is not tax guidance — confirm your position with an accountant — using GOV.UK on how Inheritance Tax works, the rules on giving gifts, and the Inheritance Tax thresholds.
Sending abroad versus receiving from abroad
The direction matters, because other countries treat gifts differently. If you send a gift from the UK to someone overseas, the recipient’s country may tax them on receiving it — several countries levy a recipient gift tax, which the UK does not. The destination country’s rules should be checked locally.
If you receive a gift from abroad into the UK, you generally are not taxed on the gift itself, but the giver’s own position can matter — for example, where the giver is a long-term UK resident, UK Inheritance Tax rules may still apply to them. The UK moved to a residence-based test for Inheritance Tax from April 2025, which is a further reason to take advice on the giver’s side. Our overview of tax on money transferred to the UK from overseas gives more background.
Worked example: a £200,000 gift towards a home abroad
Suppose a parent gifts £200,000 to a child buying a property in Spain. The money is converted to euros — and once the completion date is set, a forward contract can fix the rate so the deposit lands as planned regardless of market moves. On the UK tax side, the first £3,000 falls within the parent’s annual exemption, and the rest is a Potentially Exempt Transfer that becomes free of Inheritance Tax if the parent survives seven years. The child should separately check how Spain treats a gift received there. (Illustrative; confirm the tax with an accountant in both countries.)
Common mistakes to avoid
- Assuming there is a UK gift tax to pay — or, at the other extreme, assuming a large gift never has tax consequences. The seven-year rule can apply.
- Not preparing source-of-funds evidence, which can delay or freeze the transfer.
- Letting a bank convert a six-figure gift at a poor rate.
- Forgetting that the recipient’s country may tax the gift even though the UK does not.
- Failing to keep a dated record of the gift and the amount.
How a currency specialist helps
Cambridge Currencies is a UK specialist currency broker that helps with the currency and the transfer of a large international gift — not the tax, which is for an accountant. Through its FCA-authorised partners, Currencycloud (FRN 900199) and ScioPay (FRN 927951), it carries out the source-of-funds checks as standard, can fix the rate with a forward contract, and gives you a dedicated specialist on the phone for a high-value, one-off transfer. See our guides to the best way to transfer large amounts and our phone-based transfer specialists.
“Two things trip people up with a big international gift. One is the currency — on a six-figure sum the rate is real money, and it is worth fixing. The other is the paperwork: large gifts get checked, and rightly so. We handle both as a matter of course, so the money moves cleanly. The tax itself is for an accountant.”
Anthony Bull, CEO of Cambridge Currencies
Frequently asked questions
Is there tax on sending a large gift abroad from the UK?
The UK has no standalone gift tax. A large gift can have Inheritance Tax implications for the giver under the seven-year rule, and the recipient’s country may tax them on receiving it. Check both positions with an accountant.
Does the person receiving a gift pay UK tax?
Generally no, not on a genuine gift. The recipient does not pay income tax on the gift itself, though any income it later generates — such as interest or rent — is taxable in the normal way.
What is the seven-year rule?
Gifts to individuals above the exemptions are Potentially Exempt Transfers. They become fully free of Inheritance Tax if the giver survives seven years. If the giver dies within seven years, the gift is added back to their estate, with taper relief reducing the tax rate between years three and seven.
How much can I gift tax-free each year?
The annual exemption is £3,000, and you can carry forward one unused year, giving up to £6,000. There are also £250 small gifts per person, wedding gifts, and an exemption for regular gifts out of surplus income. An accountant can confirm what applies to you.
Will the bank or broker check a large gift?
Yes. Large international gifts trigger source-of-funds and anti-money-laundering checks. You should expect to evidence the source and purpose of the money. A regulated specialist carries out these checks as standard, which helps the transfer go through cleanly.
Can I fix the exchange rate on a gift transfer?
Yes. A forward contract can fix today’s rate for the transfer, which is particularly useful when the gift funds a target amount or a deadline, such as a property completion or a tuition payment.
Do I need to report a gift to HMRC?
Gifts generally do not need to be reported unless Inheritance Tax is due, but it is sensible to keep a dated record of the amount and recipient. An accountant can confirm any reporting obligations in your circumstances.
Does Cambridge Currencies give tax advice?
No. Cambridge Currencies helps with the currency conversion, the transfer and the source-of-funds checks. The Inheritance Tax position and any reporting are matters for an accountant or tax adviser.
Move a large gift cleanly and at a good rate
If you are sending or receiving a substantial gift across borders, a specialist can fix your rate and handle the checks so the money arrives as planned. Speak to a Cambridge Currencies specialist about your gift transfer — every transfer is arranged by phone with a dedicated specialist. Request a quote to get started.
Related guides: Large international money transfers · Understanding forward contracts · GBP to EUR
