Do I pay tax on gift money from parents overseas in the UK

Disclaimer: The contents of this article is for informational purposes only and does not constitute legal or tax advice. You are solely responsible for calculating your tax liabilities and paying them as per the applicable law. If you need any assistance to determine and pay the same please consult a qualified financial and legal advisor.

Received a gift of cash from one or both of your parents living overseas? It might be birthday money or a generous graduation gift, or perhaps funds to put towards a deposit on your first home.

Whatever the reason, you’ll need to just double-check that you don’t need to pay any UK taxes on the money.

We’re here to help, with a handy guide to whether or not you need to pay taxes here in the UK on overseas gifts from your parents abroad.

We'll also introduce the Wise account from money services provider Wise that allows you to send and receive international payments for low, transparent fees* and mid-market exchange rates.

🔎 Learn more about the Wise account

Which UK tax laws cover cash gifts received from parents abroad?

The UK doesn’t have any specific ‘gift tax’ laws, so the main tax law which covers gifts of money is inheritance tax (IHT).

This can affect cash gifts, depending on whether the parent who gave you the money dies within 7 years of sending it. In this case, the gift may be counted as part of their estate and therefore could be subject to inheritance tax.¹

You can read more about IHT in the UK over on the Government’s website.

There’s also the potential for income tax laws to come into play. You won’t pay income tax just for receiving the money, but you may have to pay it on any income the gift generates.

For example, if your parents send you £500 as a lunar new year gift and you put it in a savings account - you may then have to pay tax on the interest you earn in the account.

In most cases though, the tax-free Personal Savings Allowance on interest (currently £1,000²) should shield you from that.

📚 Receiving inheritance from abroad

Do I pay UK tax on gift money sent from parents overseas?

No, in most cases you won’t need to pay any UK tax on a gift of money your parents send you from another country.

This is because it’s not classed as income. Bear in mind though that if the money starts to earn income - such as in a savings account, for example - then this may be subject to income tax.

The only time this kind of money gift would be subject to tax is if the person who gave it passed away within 7 years.¹ In this case, it could be subject to inheritance tax. However, this wouldn’t be paid by you as the recipient of the gift, but by the person’s estate.

📚 Send gift money to friends and family

How much can I receive as a cash gift from parents living outside the UK?

You can receive a cash gift of any amount from a parent living abroad, as long as their bank and your bank allow the transfer. Banks tend to have transfer limits, and large transfers may also be subject to extra anti-fraud and anti-money laundering checks from HMRC and other authorities.

However, there are also limits on cash gifts under UK tax laws, which will apply if your parent is still a UK resident for tax purposes. If not, then the tax laws in their new country will apply.

Here are the UK’s tax rules and limits for giving gifts:¹

• Each UK tax resident can give £3,000 worth of gifts each tax year without them being added to the value of their estate for inheritance tax purposes - this is known as the ‘annual exemption’
• There’s also a small gift allowance of £250 - you can give as many gifts of up to £250 per person as you want within the tax year, provided you’ve not already used up your allowance on that person
• Birthdays and Christmas gifts given from regular income are also exempt from tax
• You can give up to £5,000 tax free to a child who is getting married or starting a civil partnership.
• You can give an unlimited amount of regular payments to help someone with living costs.

All of the above should be of interest if your parents have sent you money as a wedding gift, or to help out with rent - or a smaller sum for any other reason.

Tax can be complicated though, especially when dealing with the tax laws in more than one country. It could be a good idea for you and your parents to get some professional advice, before any money is sent.

📚 Receiving money as a gift from abroad

Do I need to declare a cash gift from abroad on a Self Assessment tax return?

No, you don’t usually need to declare cash gifts on your Self Assessment tax return. This is because it’s not classed as taxable income.

How to receive money from abroad

If you’re expecting to receive money from overseas, you’ll need to agree on a payment method and provide your account details to your mum or dad.

It’s important to check whether there are any fees involved, and decide between you who will be responsible for covering them.

For a bank transfer, you’ll typically need to provide:

• Your full name
• Your bank name
• Your account number and sort code
• Your bank’s BIC/SWIFT code and/or IBAN Either an IBAN or a sort code will also be required.

It’s a good idea to check with your bank - or your parents - to confirm exactly what information you need.

📚 Receiving money from overseas

Receiving money from abroad through Wise

Some banks can charge high fees to send money internationally, as well as adding their own mark-up to exchange rates. This could eat into the money you receive from your parents, or cost them more to send the same amount.

Luckily, there is a great alternative available. You and your parents can both open a Wise account, which lets you hold, send and receive multiple currencies all in one place.

With Wise, your parents can send you money directly in GBP, or you can choose to receive it in their local currency using local account details.

Alternatively, you can just send your Wisetag without needing to share any other account details. Find your Wisetag by tapping Payments, then Payment tools on the Wise app or on the official website. It’s indicated by an @ symbol, followed by your name and a number. You can either share a link to your Wisetag or download a QR code to give to your parents.

Whoever is converting currency, they can do it for low, transparent fees* and the mid–market exchange rate. It could save you a bundle compared to using a bank - as well as being quicker, easier and just as secure.

🌍Open your Wise account

Sources used:

1. GOV.UK - Inheritance Tax thresholds, rules and allowances on giving gifts
2. GOV.UK - tax on savings interest

Sources last checked 17-Dec-2025