Hi,
I'am caught between a rock and a hard place.
I'm UK domiciled,resident and a higher rate tax payer.
My Parents are non UK domiciled foreign citizens and have never been UK resident.
My father passed away last month. It was his wish that all his estate be passed to my mother and made some arrangements for this to happen. However due to some misunderstanding of the law his arrangements did not have the desired result.
Consequently he died intestate leaving my Mother and I, each entitled to half of his estate.
His estate comprises of about 220,000 pounds in Bank deposits and a house valued at about 100,000 pounds (all NON-UK situated).
I wish to do the right thing and want to relinquish my share of the inheritance in favour of my mother and give effect to my father's
wishes. Also there is some amount of family pressure to do so, as this is tradationally expected in our part of the world.
Once I give up my inheritance my mother will own all my Father's assets absolutely. She intends to keep the money in the Bank and live of the interest which will be substantial. She will pay tax on the interest income in her country at approx 31%.
So far so good. However having done some research I have come across this "Settlements legislation" and "Transfer of assets abroad" law. After reading these it appears to me that although I might be happy to give up my inheritance the HMRC might not feel so charitable and would want to Tax me on my mother's income.
Tax avoidance is not motive here, all I want to do is the right thing and carry out my Father's wishes, especially as I
stay away from my mother and do not look after her in any way. I should point out that it is possible that I will inherit from my mother if she leaves me her estate via her will or if she dies intestate.
Can someone please advise if the Transfer of Assets abroad law or Settlements legislation will apply to this transaction?
Thanks
Ramkumi
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