Gift or inheritance from overseas - taxable?

swadeathome

I am an Australian citizen domiciled in the UK for over 20 years. My ageing father is anxious to minimise any tax implications for me when he passes away (not imminently I hope). He is Australian resident and citizen and has no assets in the UK. I have no assets in Australia.

One option he is considering is transferring some of his assets to myself and my sisters (they are Australian residents too), but he wants to know whether there will be tax implications for me (i) on the transfer, or (ii) on remitting the money into the UK.

Assuming any Australian tax implications are dealt with, what is the UK tax situation for me?

If I receive an inheritance from him in due course (which would be cash or assets situated in Australia), my understanding is there is no UK tax payable on this or on remittance to the UK. Is this understanding correct?

TheCyclingProgrammer

(obligatory this should be a sticky....)

There is no tax on gifts received in the UK. The usual tax implications of gifts are related to inheritance taxes but they relate to the giver, not the recipient. In this case I would assume any tax implications on the giver fall under Australian tax laws.

xylophone

If I receive an inheritance from him in due course (which would be cash or assets situated in Australia), my understanding is there is no UK tax payable on this or on remittance to the UK. Is this understanding correct?

https://www.ofx.com/en-gb/personal/finances-abroad/moving-inheritance-abroad-guide/

https://www.humanservices.gov.au/individuals/enablers/gifting

The above may be worth a look.

Sea_Shell

It would appear, anecdotally, that banks can get twitchy about money coming from abroad. I'd recommend not using your main account for this money, just in case.

Manmoon

Along the same line, I would like to check with you the following:
I am a U.K. national living in the U.K. but have a sister and mother living in Lebanon, my country of origin. They would like to help me pay for a deposit in a home by sending me some money to the U.K. my questions are:
1- Are there any tax implications for me here (in the UK) for the money they send me? Around £150,000-£200,000.
2-Does the U.K. inheritance tax rule - 7 year, and maximum amount - apply on money gifted from abroad?
3-What is the actual process for transferring the money to a bank here: the donor writing a letter certifying that the money is a gift for example?

Many thanks for your replies and advice,

Manmoon

Linton

Manmoon wrote: »

Along the same line, I would like to check with you the following:
I am a U.K. national living in the U.K. but have a sister and mother living in Lebanon, my country of origin. They would like to help me pay for a deposit in a home by sending me some money to the U.K. my questions are:
1- Are there any tax implications for me here (in the UK) for the money they send me? Around £150,000-£200,000.

There are no tax implications in the UK. Whether there are in Lebanon I have no idea.

2-Does the U.K. inheritance tax rule - 7 year, and maximum amount - apply on money gifted from abroad?

UK inheritance tax rules only apply if the estate comes under UK jurisdiction. Presumably if your mother/sister die Lebanese law would apply to their estate. Of course should you die then the money is part of your estate and will be taxed accordingly.

3-What is the actual process for transferring the money to a bank here: the donor writing a letter certifying that the money is a gift for example?

You MUST discuss this with your bank before any money is transferred. They will tell you what evidence for the gift they require. If you dont talk to them the money could well be held up for a long time whilst money laundering checks are carried out.


As the money is for a house deosit I assume you are getting a mortgage for the rest. The mortgage company will require evidence that it is a gift and not a loan whch has to be repaid.