The cash gift will be paid from my personal bank account from the proceeds of the sale of the company. I will have already paid appropriate tax on the proceeds received from the sale as per the rules of Entrepreneurs Relief.
Will either of us have any tax liability on this gift given the fact the individual was also an employee of the company?
My understanding is that it would only be subject to inheritance tax if I was to die within 7 years. Is this correct, or would the previous relationship of Company director to employee complicate this and mean captial gains or income tax would be liable?
Both myself and the friend are UK residents and the business is a UK business. Our friendship predates his employment at the company by 5+ years.