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Where Taxpayers and Advisers Meet

Inheritance from Australia - CGT & IHT

Glasgow
Posts:24
Joined:Wed Aug 06, 2008 3:17 pm
Inheritance from Australia - CGT & IHT

Postby Glasgow » Fri Jan 14, 2022 11:32 am

Hi

My wife is Australian and we have been living together in the UK since 1997. She has an Australian passport but I assume that she would be regarded as domicile in the UK because she has been permanently resident here for so long and we have two adult children who were brought up in this country. My wife is a beneficiary in her mother's will. Her mother is of Hungarian descent but has lived in Sydney since she was a teenager and I therefore assume that she would be deemed domicile in Australia. Her primary asset is her main residence and she has no assets in the UK. The proceeds of any sale would be distributed between my wife and her sister (who lives in Australia).

As far as I am aware Australia has no Inheritance Tax so I'm guessing nothing significant will be deducted from my wife's share before it reaches the UK. I have read elsewhere, however, that CGT may apply in the UK. If so, would I be right in thinking that CGT would only apply to any growth in the property's value between the date of her mother's death and the date of the final sale?

If I have missed anything fundamental in terms of nasty surprises if/when this inheritance becomes a reality, I'd be grateful to hear details.

Many thanks in advance.

darthblingbling
Posts:496
Joined:Wed Aug 02, 2017 9:09 pm

Re: Inheritance from Australia - CGT & IHT

Postby darthblingbling » Fri Jan 14, 2022 11:53 am

So long as the house isn't passing to your wife and instead just the proceeds, I doubt there are any UK tax implications for your wife on receipt of the income.

If the house was instead to pass to your wife and then she, alog with her sister sold shortly after, your wife's share may be liable to CGT, but likely would be very small as it would just be on the gain arising since probate.

Glasgow
Posts:24
Joined:Wed Aug 06, 2008 3:17 pm

Re: Inheritance from Australia - CGT & IHT

Postby Glasgow » Fri Jan 14, 2022 12:17 pm

Thank you for your reply. The house probably WILL pass to her (and her sister) but, yes, that was the CGT I was anticipating and I guess there's a good chance that any such gain will be within her annual allowance.

Much appreciated.


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