Inheritance from USA

totallystumped1

I’m looking for some advice for my son please, he’s inherited $500,000 from his American grandmother. She’s left it in a trust for him and they’ve agreed that he can access it now in order to buy a house/ start a business. I’m confused about Inheritance Tax, will he have to pay on money left in a trust to him from abroad? Many thanks for any insights.

penners324

For that amount you're better getting professional advise 

Hoenir

This would be better posted on the Cutting Tax forum

Olinda99

this would in fact be better posted on the deaths funerals and probate board 

https://forums.moneysavingexpert.com/categories/deaths-funerals-probate

however to answer the question - assuming the grandmother was an American citizen fully resident in America and subject to American tax laws then inheritance tax would be a matter for the US tax authorities. 

There, as here, inheritance tax is paid by the estate not the beneficiaries

he therefore would not be subject to inheritance tax over here so assuming the full 500,000 is transferred he will be entitled to it all

Hoenir

Olinda99 said:

he therefore would not be subject to inheritance tax over here so assuming the full 500,000 is transferred he will be entitled to it all

Possibly other tax implications though. With the money held in a trust. 

Marcon

Olinda99 said:

this would in fact be better posted on the deaths funerals and probate board 

https://forums.moneysavingexpert.com/categories/deaths-funerals-probate

however to answer the question - assuming the grandmother was an American citizen fully resident in America and subject to American tax laws then inheritance tax would be a matter for the US tax authorities. 

There, as here, inheritance tax is paid by the estate not the beneficiaries

he therefore would not be subject to inheritance tax over here so assuming the full 500,000 is transferred he will be entitled to it all

The snag is that it doesn't sound as if it's coming direct from the estate. If there's a trust in existence and it is funds from that being transferred, the position could be quite a bit murkier depending on the type of trust. See https://www.gov.uk/guidance/non-resident-trusts#

Keep_pedalling

Is this a US trust or a UK one? If the former then US and UK taxation could apply.