If I inherit 60000pounds & give my 2 children 10000pounds each will they have to
Pay any tax

This sounds like a question for the British tax system.

The forum is for United States taxes.

If you are a U.S. citizen or a resident, then you don't pay any tax on the inheritance. But the money that you give to your children will be treated as a gift. The children don't pay any gift tax. You will need to file gift tax return. There is a life time exclusion of 1 million.

Actually, I think the exclusion is around 1.5 to 2 million now.

Have not checked in awhile, but is is more than $1M.

Life time gift exclusion amount is still 1 million, even in 2008 and 2009. In 2007 & 2008, the Estate exemption is 2 million, and it will be 3.5 million in 2009, and in 2010 there will not be any estate tax.

I assume you did the proper research, so I will not contest your post.

However, I would have sworn it was over $1M.

The amount was $1,500,000 in 2004 and 2005. For 2006 through 2008, the amount is raised to $2,000,000. This came straight off the IRS web site.

That is what I thought!

Thank you, Barbaruba.

The amount was $1,500,000 in 2004 and 2005. For 2006 through 2008, the amount is raised to $2,000,000. This came straight off the IRS web site.
This is Estate tax exclusion limit, not the Unified Gift Exclusion limit.

MukatA, it is the SAME thing!

The estate tax and the gift tax are linked!

When a person exceeds the $12,000 annual gift tax exemption by giving a high-value gift to anyone (including, for example, a new car for their teenager), they must file a gift tax return, but they can access their Estate Tax Exclusion Limit to avoid PAYING any gift tax.

It reduces the Exclusion Limit down the line when their estate tax is calculated, but the time-value money principle dictates that you access the exclusion and avoid paying the tax for as long as possible.