Money from Abroad - Tax Position

Pixcels

I'm writing this on behalf of an Iraqi friend living in the UK (Christian Arab) who has a possible tax dilemma - would appreciate any informed advice.
Yousif's parents died in Baghdad and he inherited their property with his two sisters.
They are now all living in the UK and upon the sale of the property in Baghdad they want to get the money into their UK bank accounts.
The question(s) are
Will they have to pay tax on the capital they import into the UK ?
I presume they will pay tax on any interest the money accrues.
Thanks for any guidance.

kidmugsy

Pixcels wrote: »

Yousif's parents died in Baghdad and he inherited their property with his two sisters.
They are now all living in the UK and upon the sale of the property in Baghdad they want to get the money into their UK bank accounts.
The question(s) are
Will they have to pay tax on the capital they import into the UK ?

Nope. "Inheritance Tax" is a misnomer - it's not a tax on inheritances, it's a tax on estates. As the estate was an Iraqi one it's not taxable in the UK.


In the UK their can be a CGT liability if a property has gone up in value between inheritance and sale: I have no idea if that would be the case if the property was owned and sold abroad. I'd guess not, but what's a guess worth?

00ec25

the movement of the money into the UK will not be subject to any tax in the UK (Iraq may of course have it sown rules)

BUT

as UK residents, Yousif and each of his sisters, are liable to Capital Gains Tax (CGT) on any gains made from selling overseas property in exactly the same way as they would be if they sold a UK property which was not their main home:

https://www.gov.uk/tax-sell-property/selling-overseas-property

however, you have not given enough info to establish if there is actually any gain because that depends on:
a) when did the parents die and they become owners?
b) did they live there as their main home after the parents died and they were thus its owner occupiers?
c) have they actually made a gain and is each person's share of the gain more than each person's UK CGT allowance (£11,300)? So the property would have had to increase in value by more than £33,900 between death and sale for them to face any CGT bill (assuming they each owned 1/3rd)