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Where Taxpayers and Advisers Meet

UK Resident, NZ inheritance question

SRichardson
Posts:4
Joined:Mon Aug 16, 2021 1:25 pm
UK Resident, NZ inheritance question

Postby SRichardson » Mon Aug 16, 2021 1:33 pm

Hi there,
I am a UK Resident, but Mum, Dad & sister are all NZ residents. My sister lives with my Mum & Dad and will continue to do so.

We are trying to work out what happens to their estate (eg. their house) when they pass away.

I understand that, were we to sell the property following their deaths and send my share of the proceeds from NZ to the UK, that that would not attract any inheritance tax.

However, the complication is that my sister would like to stay in my Mum & Dad's house, potentially for years after their deaths.

Are there any UK tax implications to holding onto the house for several years after their deaths? Or will it still not attract any inheritance tax no matter how long my sister holds on to the house?

Cheers
Sam

pawncob
Posts:4750
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: UK Resident, NZ inheritance question

Postby pawncob » Tue Aug 17, 2021 10:26 am

Assuning you own it jointly with your sister, you'll be liable for tax on any income received and CGT on any sale in the future. Any IHT matters will be dealt with in NZ.
With a pinch of salt take what I say, but don't exceed your RDA

SRichardson
Posts:4
Joined:Mon Aug 16, 2021 1:25 pm

Re: UK Resident, NZ inheritance question

Postby SRichardson » Tue Aug 17, 2021 10:55 am

Yes we own it jointly. By income do you mean if we were to rent it out?

And regarding CGT, between which dates would you compare the house valuations to work it out?

SRichardson
Posts:4
Joined:Mon Aug 16, 2021 1:25 pm

Re: UK Resident, NZ inheritance question

Postby SRichardson » Tue Aug 17, 2021 11:54 am

For example would the dates be from my parents death and the ultimate date of house sale? So I'd only pay CGT on the amount the house increases in value over that time, not the whole house value presumably?

pawncob
Posts:4750
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: UK Resident, NZ inheritance question

Postby pawncob » Tue Aug 17, 2021 12:26 pm

CGT base cost would be probate valuation. Gain would be sale price less base cost.
If not let, then no income.
With a pinch of salt take what I say, but don't exceed your RDA

SRichardson
Posts:4
Joined:Mon Aug 16, 2021 1:25 pm

Re: UK Resident, NZ inheritance question

Postby SRichardson » Tue Aug 17, 2021 12:55 pm

I forgot to mention, the house is in a trust, does that affect any CGT payable? Or are the rules the same, and if so, would the starting valuation be the probate valuation or when the trust is wound down?


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