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I have a father who passed away, my Father was living abroad and had a property, I want to sell the property there and buy properties here in the UK. The value is £400,000.
How much Inheritance tax do I have to pay ?
Is there also CGT or Income tax which I will have to pay for this ?
How do I get the money overseas ?
Ignoring taxes in the country where the property is situated, there is no CGT to pay on death nor income tax.
IHT will be dependent on your fathers estate values.
Need more info or a chat to understand details.
Was your father UK domiciled? If so there is UK IHT to potentially pay.
It is unlikely that you will have IT or CGT to pay. The estate may have but it is usually because the estate was not wound up for a time.
The personal representative to the estate will be able to advise you. When we do probate work with an international angle there is usually a need to liaise with the professionals/family in the other country(ies) so as to ensure that local rules are applied too. This applies as much to tax as legal ownership.
Your last question can be read both ways so I am not sure I understand. The person in charge of the estate will be able to advise you but remitting money is the least of your administrative headaches..
Chartered Accountant, Tax Advisor and Mortgage broker
(and BTL portfolio owner)
Stuart, would the personal representative to the estate have to complete the final UK tax return to the date of death and then pay any IT from the estate prior to distribution of the estate?
From a UK estate perspective, the estate cannot be distributed without probate being granted (or the PR takes liability for it) and that requires the taxes to be paid.
the IT for the year to death is a liability of the estate, any income or CGT post death is for the estate’s account. The PR should should be looking after this for you. Have you not appointed a professional to help you with this?
Thanks. My understanding is consistent with what you have written. Its just that with the mention of no IT to pay in this thread, I was beginning to question my understanding.
I see the value and I am all for using professionals where cost effective. However, there are some estates and some parts of some estates where it may not be cost effective and then you just have to muddle through to get the best outcome for the beneficiaries, e.g. foreign solicitors quoting a fee of £2,000 to obtain essentially a reseal of the UK grant of probate in the foreign country to recover an asset of £1,000.
I understand. When I charge for probate work I try and ensure that the benefit outweighs the costs but the probate rules are so tight on purpose to make sure no shortcuts are possible and so commercial common sense is lost. My clients always ask for common sense but legally you cannot be sure who the beneficiaries are if you take short cuts so unfortunately it's higher fees. Fortunately as I'm a tax advisor as well I try and make savings to offset these additional fees.
For getting the money from foreign tenants to the UK, I use Transferwise. For a £400,000 transfer from Euros to Pounds you will be charged approx 1164 euros (0.25%) with the transfer done at the spot rate. If you transfer 450,000 euros -> pounds -> euros you would have 447,662.98 euros. I've never checked how much it would cost to do a transfer with a bank for this amount but smaller amounts have normally been done at over 5% commission.
You may need a bank account in the local currency to take advantage of this if you are unable to use your father's account as it is for transfers between bank accounts.
You could look into the Transferwise borderless account but I have never investigated this.
My only link with Transferwise is as a user of their services.