Q718. Parent in India sending money to children in UK. Tax liability in UK

Question: Dear Sir, I want to send money from India to my son and daughter-in-law who are UK citizens. How much money can I send as gift to them, what is maximum limit permissible under Indian tax laws? What will be their tax liabilities in UK? [January 25, 2016]

Answer: Money sent by a parent resident in India to children in UK should not attract tax in UK. When sending money abroad make sure that proper banking channels are used to remit money. These days, money laundering is of concern in most countries and having proper documentation does help avoid possible problems. As for how much money can be sent abroad from India by Indian residents, under the Liberalized Remittance Scheme (LRS) all residents can remit US$250,000 per financial year without any permission from the RBI. Kindly refer to an articles on this website for more information. The article is titled: 1. How to send money from India to a foreign country >> 2. Sending money out of India by Residents & Non-Residents >> I assume you are not UK citizens. UK has a rule that if a UK residents gift large sum of money, property etc. to a relative, although no tax may apply, there is a condition that in case the donor passes away within 7 years then the gifted amount is subject to tax. This rule is to stop UK residents from cheating on inheritance taxes by gifting away their assets.