Gift Tax Returns
Form 709, Form 3520, Form 3520-A
Form 709 for US donors and Form 3520 for US recipients of foreign gifts, with the UK inheritance tax position on the same transfer.
What does Gift Tax Returns involve?
The US taxes the giver and the UK, in most cases, looks to the giver's estate years later. A transfer that needs no UK paperwork at all can require a US return. We prepare Form 709 for US donors and Form 3520 for US persons who receive gifts or bequests from abroad.
Forms and filings involved
- Form 709
The US gift tax return, which Americans in the UK often need for gifts to a non-US spouse, children or property bought jointly.
- Form 3520
Reporting for US persons who receive large gifts or inheritances from abroad or who deal with a foreign trust.
- Form 3520-A
The annual information return for a foreign trust treated as owned by a US person, normally filed by the trustee.
When a family gift becomes a US filing
US gift tax falls on the donor. A US citizen or domiciliary who gives any one person more than $19,000 in a year files Form 709, due on 15 April of the following year.
Filing rarely means paying. Gifts above the annual exclusion reduce the lifetime exclusion, currently $13.99 million, and tax is due only once that is used. Gifts between spouses are unlimited only when the recipient is a US citizen. For a spouse who is not, the annual limit is $190,000.
This is where mixed-nationality couples are caught. Transferring money into a spouse's sole account, buying investments in the spouse's name, or giving shares in a family company can each be a gift for US purposes, even though UK inheritance tax generally exempts transfers between spouses. Gift splitting is not available with a non-resident alien spouse. Form 709 is also where generation-skipping transfers are reported, and the statute of limitations on a gift's value only starts to run if the gift is adequately disclosed.
The UK has no gift tax as such. Most lifetime gifts to individuals fall out of account if the donor survives long enough, and otherwise inheritance tax can apply at up to 40% above the £325,000 nil-rate band. Since 6 April 2025, exposure on worldwide assets turns on long-term residence, broadly UK residence in ten of the previous twenty tax years, and not on domicile. Going the other way, a US person who receives more than $100,000 in a year from a foreign individual or estate reports it on Form 3520.
Gift reporting we prepare
- 01
- Form 709 for gifts above the annual exclusion, with valuations attached
- 02
- Gifts to a non-citizen spouse measured against the higher annual limit
- 03
- Lifetime exclusion used to date tracked across every return filed
- 04
- Form 3520 for gifts and bequests received from non-US family
- 05
- UK inheritance tax position on the same transfer checked alongside
Who this is for
US citizens making gifts to a British spouse
- Parents helping children with a house deposit or other large sums
- Americans who received a large gift or inheritance from UK relatives
- Business owners transferring shares to the next generation
Why US UK Tax Returns
Each return is prepared with the other country's return open beside it, so a credit, election or disclosure on one is supported by the other.
One File
US and UK returns prepared in the same engagement and reconciled line by line.
Primary Sources
Every position traced to the Code, the treaty, IRS instructions or HMRC guidance.
Scope First
Returns, forms, years and fee agreed in writing before work begins.
The Same People
The team that files this year carries the elections and credits into the next.
Questions we are asked
I gave my daughter money for a house deposit. Do I owe US gift tax?
Probably not, but you may need to file. If the gift to her exceeded $19,000 in the year, Form 709 is required. The excess is set against your lifetime exclusion of $13.99 million, and gift tax is payable only after that is exhausted. A married couple who are both US citizens can elect to split the gift. The return still matters, because it records how much exclusion remains.
My husband is British. Can I give him whatever I like tax-free?
Not for US purposes. The unlimited marital deduction applies only where the recipient spouse is a US citizen. For a spouse who is not, gifts are free of reporting up to $190,000 a year, and anything above that needs Form 709 and uses your lifetime exclusion. UK inheritance tax generally exempts gifts between spouses, so the US return is the one people miss. The treatment of jointly owned property follows separate rules.
My mother in England left me money. Do I need to tell the IRS?
If you are a US person and the total received from her or her estate in the year exceeds $100,000, yes, on Form 3520. The inheritance is not taxable income in the US and no tax is due with the form. The penalty for not filing is proportional: 5% of the gift for each month it goes unreported, capped at 25%. If the money sits in a UK account in your name, FBAR and Form 8938 reporting may follow.
Primary sources
What this page says is drawn from the official material below. Read it yourself; we would rather be checked than trusted.
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