Hi,
I have inherited a half share of my father's property. It will be sold to pay off the outstanding mortgage and there is no inheritance tax or capital gains to pay based on UK rules. I am french tax resident and have been so for 8 of the last 10 years and so I think I'm liable to pay succession tax but can't find any info on what I would pay because the property was in the UK. If it is treated just as if it were a french property I have that info.
Can anyone point me to the relevant website or info or has anyone been through this situation themselves?
Thanks in advance for any experience you can share.
Cheers
As I understand it (no expert, especially in french tax matters....) the deceased's estate is liable to UK IHT if it is due not the beneficiary.
I think many people think otherwise as due tax has to be paid before probate is granted. In the case of a property, it cannot be sold prior to probate being granted, so effectively the beneficiary might have to pay it up front, especially if there was not also enough cash left by the deceased, just to be in a legal position to sell. Banks offer short term loans to get around this 'little' gotcha.That however afaik, alters nothing regarding the liability to the tax. It would not be your liability in any case, it would be your father's. It therefore doesn't matter where you are resident, it was where he was resident.
As I assume the estate is <£325k (the nil rate band) so no tax is due, then neither do you have an liability because you never did anyway. I think.
However you might want to mention to the French lot why you suddenly have some income. That way nobody can ever accuse you of not declaring it when you should. This is what I did and no tax was due anyway for the reasons just discussed.
With regard to inheritance tax.Its all based where you are tax resident. i would ring the tax office here as you would probally have to pay the difference. try finding a english speaking notary. The british Embassy will have a list and they can best advise what theconvention is . Good luck as is complicated and if not declared fines can be incured.Its meant to be payed within 12 mths of t he date of death!
Thanks all so much for your help. That's one less thing to worry about....
Cheers,
Kate
When my mother-in-law died we tried to declare my husband's inheritance to the French authorities. Having been sent a form, none of the info requested was relevant so I rang the relevant tax office to ask about it, and was told that there was no need to declare his inheritance over here as his mother was British, UK resident and any taxes (which there weren't any, anyway) would only be due in the UK. So that was that!
Kate - This happened to a friend of mine about 9 years ago. What it comes down to, based on the 1963 Estate Taxation double tax convention, which is still applicable, is that succession tax on land, and other immovable property, is only due in the country where it is situated. As the tax payable there (the UK) happens to be zero, it is fully satisfied and there is no tax liability in France.
This friend kept the money in the UK & didn't declare it in France, but I believe it should be declared, which would explain where it came from if transferred to France. All the same, there were no repercussions in my friend's case, as far as I know.
Capital Gains tax wouldn't be applicable to you anyway, as it was your father's property until his death.