Hi Corry,

there are all sorts of rules around the giving and receiving of gifts but in this instance short answer is that there is no income tax as it's not income.

Also, gifts of cash are not Capital Gains so no CGT.

So, for the person receiving the gift a cash gift out of disposable taxed income it is not taxable on the recipient.

For the person giving the gift there are inheritance tax considerations related to the reduction of the value of the estate but £3000 is the annual gift exemption so there is no issue there (all sorts of other considerations on IHT but it passes the first test so no need to consider that further).

But, if the person receiving the gift of cash is in receipt of working / child tax credits a regular gift can affect their amount of entitlement to such benefits.

Also if they earn any interest on the money gifted that is taxable income.

That's a very short answer on a hugely complicated area.

Hope that it helps get you started,

kind regards,

Shaun.

p.s. if the person giving the gift was receiving something in return for the gift of cash (services / care / accommodation / etc.) then other rules override those stated above and the gift would have been taxable (or by claim against the estate of the person bequeathing the gift with reservation).