Non Dom Gift/Inheritance

[Benny09]

Thank you for providing an informative website.

My Father was non UK domiciled and non resident in the UK. He is now deceased, and left money to me. I am both UK resident and deemed UK domiciled (>17yrs in UK).His bank account is held overseas. The money is made up of Interest and capital only( mixed fund).
If the money is transferred to my UK bank account, will there be any tax implications, i.e. IHT?

What is the best way to transfer the funds into my account in the UK?

Thank you and kind regards

[tax_schmax]

From your perspective, the gift is one cleansed fund of cash with no tax liabilities in the UK. Before it comes to you, it will need to be treated in accordance with the tax laws where your father was resident.

[Benny09]

Thank you for the advice tax_schmax. I was also under the impression that the transfer would be exempt from IHT as the Donor is Non Domiciled and did not live in the UK.
However, is there a specific way that the funds must be transferred from donor's account to reciepient's account? I came across an article that stated the amount to be transferred cannot be drawn on a uk cheque as it would constitute as a remittance.

As far as the Law of My Father's country is concerned, there is no death duty, so all is fine on that front.

Thanks again

regards

Benny

[tax_schmax]

Broadly speaking, the estate of the deceased pays IHT. The rules you will have been looking at are for UK individuals. As your father was not UK, our IHT laws do not apply to him. If there is no IHT in his country, there is no IHT to worry about.

In respect of receiving the proceeds in the UK, once the assets are yours, they will be earning income, interest or capital gains in your name. There may be some amount of income or growth earned by you overseas if there is a period between you attaining ownership of the assets, them leaving the estate of your father and them finally arriving in the UK. Normally, the proceeds come directly from an estate to the beneficiary. Without knowing where the assets come from and the laws of the land that apply there, it is impossible to give more guidance. Normally, the executors wind up an estate and there is no delay between leaving the estate of the deceased and the beneficiaries receiving their legacies. My gut says you have little to worry about.

[maths]

The monies in the non-UK bank account of your father following his death are in principle no longer a mixed fund and hence can be remitted without any UK IHT consequences.

However, if the monies are held in non-sterling then on remittance (pre 5 April 2012) there may be a CGT liability depending upon the movement in the £ exchange rate between death and remittance to the UK.

If after death any other income/gains have been added to the account prior to remittance then the account becomes a mixed fund for income tax and CGT and a possible income tax and/or CGT liability may arise with respect to such additions on remittance.

[Benny09]

Thank you Maths & tax_schmax for your kind advice.
I think you've answered my question,and I feel rest assured.
Thank you guys once again on this very useful forum.
regards
Benny