Foreign Land Sale Tax

LurthersBoots

Morning everyone.
My father's family inherited land from India and they have agreed to sell this recently. They are splitting up the dividends between family members.
My father who is in Australia is looking at sending his share to me in Australia as a deposit for a house. At present he plans to take possession of the funds and then transfer to me.
The figure is roughly £50k.

What is the best way to go about this to minimise the taxes and maximise the amount for me over here?

LB

ceeforcat

Your father is giving you a gift of £50000 it would appear. If that is so there are NO tax implication FOR YOU - no taxes on gifts received in the UK. Lodge and keep.

LurthersBoots

So, he would incur the taxes on his end for the inheritance of the land and that money is then transferred to me as a gift NOT incurring any other taxes.

Cool.

ceeforcat

LurthersBoots wrote: »

So, he would incur the taxes on his end for the inheritance of the land and that money is then transferred to me as a gift NOT incurring any other taxes.

Cool.

I don't think that I said any of that - you had asked specifically how to 'minimise the taxes and maximise the amount for me over here?' and I answered that.

It is possible that he may have Capital Gains Tax to pay in Australia, having sold the land - I have no idea. However, I would presume that the gift to you would be from his proceeds after sale. The other issue is the effect on your father's estate but I have no knowledge of Australian tax rules in that regard but, again, that was not the question that you asked!

LurthersBoots

Thanks.
You did answer my question correctly. And I am planning on getting further professional advice beforehand however I wanted to use this as a sounding board to make sure we go about the txr the right way.

I have also researched on the back of your helpful reply and found that if in the unfortunate event of my fathers passing within 7 years, I would be liable to pay a tapered IHT.
That could be anywhere between 40% & 8% on a sliding scale.
Where you aware of this?
Regards,
LB

ceeforcat

1) the answer which I gave was, I hope, complete. Your father can give you a cheque, transfer by Bacs - whatever - there are no implications! I see no reason to seek professional advice.

2) The second part of your response is factually incorrect thorughout I am afraid. In the UK, your father's estate would have to include the gift if he died within seven years but this is only an issue if the estate was to be valued at £325000 or above, possibly more. You will pay nothing! Ever! Any liability belongs to the estate, not you! However, is your father not an Australian resident? If so, none of this is relevant as I previously stated and I have no knowledge of inheritance tax in Australia. Either way the same applies - YOU have no tax issues regarding the gift.

LurthersBoots

Cheers, ceeforcat.