If a friend from the U.K. is wanting to give me a large amount of money, why would they need my signature? They haven't requested any bank account details, but why would I need to sign something to receive money? Is there a way of transferring money into my name without it going to a bank account or could this be a scam?
It's got every sign of a scam. Signatures are needed on contracts, so you should only place them on below one. Free money sounds too good to be true. Money evading banks is a typical sign of money laundering; why are they trying to avoid paper trails?
The normal way to gift money is to just hand it over or pay it to a bank account. If anything, you sign a tax declaration, but you would send that to the taxman yourself.