Inheritance abroad

jorntomter

Hi,
I am a Norwegian who lives and pay tax in the UK. I have inherited parts of my late godfather's (He is Norwegian and lived in Norway all his life) property in Norway and once it is sold it will leave me in the region of £250 000 I will then transfer to the UK. So my questions are:
1. Do I need to pay any UK inheritance tax on this amount?
2. Do I need to pay any other UK tax after I have transferred the amount? I am aware that if I invest it in a property then I need to pay tax on any profit from this.
Many thanks in advance,
Jørn

Yorkshireman99

jorntomter wrote: »

Hi,
I am a Norwegian who lives and pay tax in the UK. I have inherited parts of my late godfather's (He is Norwegian and lived in Norway all his life) property in Norway and once it is sold it will leave me in the region of £250 000 I will then transfer to the UK. So my questions are:
1. Do I need to pay any UK inheritance tax on this amount?
2. Do I need to pay any other UK tax after I have transferred the amount? I am aware that if I invest it in a property then I need to pay tax on any profit from this.
Many thanks in advance,
Jørn

No IHT is payable by beneficiaries in most circumstances. You have nothing to pay.

Spelunthus

In UK, you pay no IHT to receive an inheritance. The money is yours, as a gift. You may need to re-assure your bank about where the money came from because of money laundering rules. You may need a (translated )will, or lawyer's letter.
What you do with the money in the UK is up to you. As you say, any investment etc that you make with the money in the UK may have tax implicatuons.

Brighty

Spelunthus wrote: »

In UK, you pay no IHT to receive an inheritance. The money is yours, as a gift. You may need to re-assure your bank about where the money came from because of money laundering rules. You may need a (translated )will, or lawyer's letter.
What you do with the money in the UK is up to you. As you say, any investment etc that you make with the money in the UK may have tax implicatuons.

Not that it matters to the OP, but this isn't strictly true.

It all depends on the IHT rules in the country where the deceased lives.

In Germany for example, IHT tax is paid by the beneficiaries, not the estate. The beneficiaries pay a rate of IHT depending on the amount received and how closely they were related to the deceased.

If OP's godfather (not related?) was German and not Norwegian, he would have to pay 30% of his inheritance in IHT to the German tax man. I assume there could be a similar issue with other countries.

As i said, in the OP's case, it's not an issue as since 2014 there is no IHT at all in Norway, so not an issue, but just thought i'd mention that it's not always the case that beneficiaries pay nothing

Brighty

Yorkshireman99

Brighty wrote: »

Not that it matters to the OP, but this isn't strictly true.

It all depends on the IHT rules in the country where the deceased lives.

In Germany for example, IHT tax is paid by the beneficiaries, not the estate. The beneficiaries pay a rate of IHT depending on the amount received and how closely they were related to the deceased.

If OP's godfather (not related?) was German and not Norwegian, he would have to pay 30% of his inheritance in IHT to the German tax man. I assume there could be a similar issue with other countries.

As i said, in the OP's case, it's not an issue as since 2014 there is no IHT at all in Norway, so not an issue, but just thought i'd mention that it's not always the case that beneficiaries pay nothing

Brighty

The OP only asked about the UK tax rules and inheritance from a Norwegian citizen resident, and presumably domiciled, in Norway so Spelunthus was quite correct.

Brighty

Yorkshireman99 wrote: »

The OP only asked about the UK tax rules and inheritance from a Norwegian citizen resident, and presumably domiciled, in Norway so Spelunthus was quite correct.

He was correct in the OP's case, but I was merely pointing out that his statement "In UK, you pay no IHT to receive an inheritance." is not true in all cases, depending where the deceased was resident/domiciled. You pay no UK IHT, but still may have to pay IHT. In the OP's case, Norway=no IHT to pay, but if it was Germany for example, he would have to hand over 30% after he'd received it. It wouldn't be deducted by an executor before he got it, like in the UK, it would be his responsibility to fill in an IHT return and pay up.

Brighty

Curlylady

My siblings and I had to pay inheritance tax for assets we inherited in Italy as forced heirs. Nothing paid here in the UK.

Yorkshireman99

Curlylady wrote: »

My siblings and I had to pay inheritance tax for assets we inherited in Italy as forced heirs. Nothing paid here in the UK.

What do you mean by forced heirs? AFAIK nobody can be forced to inherit. Just curious.

poppystar

Yorkshireman99 wrote: »

What do you mean by forced heirs? AFAIK nobody can be forced to inherit. Just curious.

I think the 'forced' bit applies to the estate i.e.. you are forced in these countries to provide for certain kin before you are free to will the remainder of your assets to those same kin or to others.

I can't imagine you are forced to inherit but to decline to avoid paying the tax where applicable would be a bit of a throwing baby out with bathwater. I'd rather accept a forced inheritance of £1 m and pay tax than say I don't want it

Yorkshireman99

poppystar wrote: »

I think the 'forced' bit applies to the estate i.e.. you are forced in these countries to provide for certain kin before you are free to will the remainder of your assets to those same kin or to others.

I can't imagine you are forced to inherit but to decline to avoid paying the tax where applicable would be a bit of a throwing baby out with bathwater. I'd rather accept a forced inheritance of £1 m and pay tax than say I don't want it

That is exactly why I was curious! I was wondering if there was some obscure reason that I had not heard of.

Curlylady

In Italy, the law is very complex. My mother inherited my fathers ancestoral home, Succession is a legal requirement to pass down assets, whether a will has been left or not. As soon as one of the successors passes away, the next of kin become forced heirs and responsible for all debts and payment of bills etc. I have been working closely with a lawyer who specialise in cross border succession, which must be completed within a year of the deceased. I have since learnt that you can decline the sucession, however this is more complicated to achieve. The system is there to ensure that all assets go to rightful heirs. Hope that explains a little.