Gift Tax UK: Uncle & Niece

This query is : Resolved

Quick Summary

This discussion clarifies the tax implications of gifting money to a maternal uncle in the UK. It explains that while a niece can receive tax-free gifts from her uncle (as he is considered a relative under Section 56(2)(x) of the Income Tax Act), gifts made by a niece to her uncle are taxable because the uncle is not classified as a relative from the niece's perspective under the same act. The query also touches upon the possibility of creating a gift deed retrospectively for past gifts.

Shantanu Bose

Shantanu Bose (Querist)
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03 April 2025 Sir,
My question is :
Why gift money to maternal uncle is taxable u/s 56(2)(x) if brother of parent of an individual is counted as relative according to section 2(41) of income tax,1961 ? My maternal uncle is certainly the brother of my mother who is my parent ?

Also please clarify if gift deed can be made now for gift given in the past.

Thank you

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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03 April 2025 As per sec. 56(2) IT act, niece is not relative for uncle... hence gift received from niece is taxable..

Shantanu Bose

Shantanu Bose (Querist)
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04 April 2025 Ok thank you sir, but is uncle relative for niece ? What about gift received from uncle ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 April 2025 Reverse is true, for niece: uncle being 'Brother or sister of either of the parents' is relative as per the sec. 56(2)(x) IT act; hence niece can get tax free gift/s from uncle or Bua.

Shantanu Bose

Shantanu Bose (Querist)
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04 April 2025 Thank you sir for your kind help

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 April 2025 You are welcome.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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29 September 2025 Good luck..

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