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The short answer
Generally no. A cash gift is not income, and an HMRC adviser has stated that "there are no Income Tax implications on the receipt of a cash gift unless the cash gift generates interest or dividends". UK Inheritance Tax is charged on the giver's estate, not the recipient, and for a giver based outside the UK it applies only to UK assets. What you should keep is a clear paper trail, because your UK bank may ask where the money came from.
Parents in Nigeria often help children in the UK: a deposit on a flat, tuition, a wedding, a new baby. The common worry is whether HMRC will treat that money as income, or whether some tax is due when it lands. For most families the answer is reassuring, but there are a few edges worth knowing, and the practical issue is usually the bank rather than HMRC.
Income Tax: a gift is not income
UK Income Tax is charged on income such as wages, self-employed profits, rent, pensions, interest and dividends. A gift is not on that list. On HMRC's Community Forums, an HMRC adviser replied in February 2024 that "There are no Income Tax implications on the receipt of a cash gift unless the cash gift generates interest or dividends", and that for the recipient "it doesnt matter where the funds have came from". Forum replies are not formal guidance, but they reflect the general position.
Two cases are different:
- Interest on the gift. Once the money is in a savings account, the interest is yours and is taxable in the normal way, within your Personal Savings Allowance (£1,000 for basic-rate taxpayers, £500 for higher-rate) or tax-free inside an ISA.
- Money that is not really a gift. If the payment is for work you do, rent from family property, or profit from a business you share, it is income, whatever the family calls it.
Inheritance Tax: the giver's side
GOV.UK explains that Inheritance Tax is paid from the estate of the person who dies, not by the people who receive gifts or inheritances. Gifts made in the seven years before death can count towards the estate if they exceed the £325,000 threshold. But GOV.UK also says that if the person is based outside the UK, meaning they have lived in the UK for less than 10 of the last 20 years, Inheritance Tax is only paid on their UK assets.
So for parents who live in Nigeria and send money from Nigerian accounts, UK Inheritance Tax is unlikely to be relevant to the gift. If your parents have lived in the UK for long periods, or own UK property, the position can differ. This is information, not tax advice.
The bank's side: proving the source
UK banks must understand money coming into an account, especially large or unusual sums from abroad. A gift that HMRC would never tax can still trigger questions from your bank. Prepare:
- A short signed gift letter from your parent: their name, your name, the amount, the date, that it is a gift and not a loan.
- Your parent's bank statement showing the money leaving their account.
- The transfer receipt or provider's confirmation.
- Evidence of where your parent's money came from, if the sum is large: a property sale, retirement benefit or business income.
Mortgage lenders often want the same evidence for a gifted deposit, so keeping it from the start saves time. Our guides on why a UK bank asks about money from Nigeria and proving the source of funds go into the process.
The Nigerian side: how parents can send
How your parents send affects the paperwork. Under the CBN's 2026 Foreign Exchange Manual, as summarised by Mondaq, holders of self-funded domiciliary accounts no longer need Form A for outward remittances and can make direct telegraphic transfers of up to USD 10,000 a day. Buying foreign currency with naira runs through the bank's own processes. See how family in Nigeria can send money to the UK.
If it is really a loan
Families sometimes call money a gift when everyone expects it to be paid back, or call it a loan to keep a sibling happy. Be clear about which it is, and write it down. A loan is not income either, but it is a debt: a mortgage lender will treat it differently from a gift, and if your parent later needs the money back, an unwritten arrangement can cause disputes. If a loan carries interest paid to your parent, that interest is their income, taxed where they are resident.
A gift letter that says "not a loan" should therefore be true. Lenders and banks rely on it, and a letter that misdescribes the money creates more problems than it solves.
A worked example
Example only. Your mother sends you £8,000 as a gift towards a flat deposit. You put it in an easy-access account paying 4% a year for 12 months and earn £320 interest. The £8,000 is not taxable. The £320 is savings income; if you are a basic-rate taxpayer with no other interest, it falls within the £1,000 Personal Savings Allowance, so no tax is due on it either.
Where Pryme fits
Parents in Nigeria and children in the UK can each open a Pryme account, which holds naira and pounds with local details for each. Every transfer has a record, and either of you can generate a verifiable statement that a UK bank or mortgage lender can check is genuine and unaltered; see receipts and statements.
Questions people ask
Do I pay tax on money my parents send me from Nigeria?
Not normally. A gift is not income. An HMRC adviser has said there are no Income Tax implications on receiving a cash gift unless it generates interest or dividends.
Do I need to declare a gift from abroad to HMRC?
A gift itself is not income, so there is usually nothing to report. Interest it earns is reportable if above your allowances. This is information, not advice.
Will my UK bank ask about money from my parents?
It may, especially for large sums. A gift letter, your parent's statement and the transfer receipt usually answer the question.
Does the seven-year rule apply to my parents in Nigeria?
GOV.UK says that for someone based outside the UK, Inheritance Tax applies only to UK assets, so it rarely affects gifts of Nigerian money.
Sources
- HMRC Community Forums: tax on gift money from abroad (HMRC replies, 20 Feb 2024) · accessed Oct 2026
- GOV.UK: Inheritance Tax (updated 30 Sep 2026) · accessed Oct 2026
- GOV.UK: Inheritance Tax when someone living outside the UK dies · accessed Oct 2026
- GOV.UK: Tax on savings interest, how much is tax free · accessed Oct 2026
- Mondaq (Pavestones): Key regulatory update, the CBN Foreign Exchange Manual 2026 (24 Jun 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.