Re: Gift tax question
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Begin paying taxes to who? This guy has nothing to do with the US whatsoever I assume. He paid income tax in his country, now wants to give gifts. Why would this ever be taxed or use up any kind of credit? He's never even heard of the IRS...
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The US gift tax only applies when a US citizen gives more than $12,000 to a non-spouse US citizen in a year. OP talked about someone from the UK giving the large gift. I switched it in my example; the gift-giver was a US citizen. When they give more than $1 million+ over their lifetime, they begin paying the gift tax to the IRS (that is, US Treasury, US government).
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Also, a random thought - what if a person loans you $1 mil USD deferred for 99 years (even if he is a US citizen)?
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If it's a true loan, paid at a fair market interest rate, then there is no gift involved, and no gift tax return has to be filed.
-Tom
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