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Where Taxpayers and Advisers Meet

Reporting Inheritance and Tax Obligations to HMRC

Raylaw2017
Posts:2
Joined:Thu May 09, 2024 7:24 pm
Reporting Inheritance and Tax Obligations to HMRC

Postby Raylaw2017 » Thu May 09, 2024 7:28 pm

I recently inherited a one-third share of an income-generating property from my father, a non-UK citizen domiciled in Thailand, who has passed away. As all the income from this property supports my mother's living expenses, I need guidance on reporting this to HMRC as a British citizen. Am I also responsible for paying any taxes in the UK on this income?

maths
Posts:8515
Joined:Wed Aug 06, 2008 3:25 pm

Re: Reporting Inheritance and Tax Obligations to HMRC

Postby maths » Fri May 10, 2024 6:38 pm

There is no need to report the inheritance itself.

However, assuming you are UK domiciled and UK resident you will need to report future rental income (less tax deductible expenses).

If you sell you will be exposed to capital gains tax on any gain.

Raylaw2017
Posts:2
Joined:Thu May 09, 2024 7:24 pm

Re: Reporting Inheritance and Tax Obligations to HMRC

Postby Raylaw2017 » Fri May 10, 2024 7:50 pm

Thank you for getting back to me. Since I own one-third of the income-generating property and my brother and his son own the rest, all the income from this property goes towards my mum's expenses, and I do not receive any money from it. How should I report this to HMRC? Furthermore, since this property is subject to taxation in Thailand, would I be eligible for any tax relief in the UK?

AGoodman
Posts:1777
Joined:Fri May 16, 2014 3:47 pm

Re: Reporting Inheritance and Tax Obligations to HMRC

Postby AGoodman » Tue May 14, 2024 10:29 am

So the starting position is that (assuming you are UK tax resident) you are liable for income tax on one third of the properties minus any deductible expenses.

The fact you then give the rent to your mother is irrelevant.

However, you will be able to deduct Thai income tax on the rent from your UK tax liability - the former is credited against the latter: most likely under Art 23(1)(a) of the UK /Thai tax treaty. You may well have to file a UK tax return to claim the treaty relief.

maths
Posts:8515
Joined:Wed Aug 06, 2008 3:25 pm

Re: Reporting Inheritance and Tax Obligations to HMRC

Postby maths » Mon May 20, 2024 5:10 pm

The rental income less expenses (based on 1/3rd) will be subject tomUK income tax and will need to be reported.

Note that income and expenses are each reported in sterling at the dates each are received not Thai currency.

Any Thai tax paid on the rent less expenses will be offsettable against any UK income tax charge.


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