Will my UK Inheritance money be taxed in Australia
#1
Will my UK Inheritance money be taxed in Australia
I have 90k GBP sat in my UK bank which I inherited from my Grandfather last year. I have been reluctant to transfer to Australia as I am a greedy cow who wants as many $$$$ as I can get and as we all know the exchange rate isn't that flash just now.
Someone got me worried this week because they told me that because I didn't bring it within 6 months of receiving it that I would be taxed on it here in Australia.
Anyone know if this is indeed the case.
Much appreciated in advance.
Someone got me worried this week because they told me that because I didn't bring it within 6 months of receiving it that I would be taxed on it here in Australia.
Anyone know if this is indeed the case.
Much appreciated in advance.
#2
Home and Happy
Joined: Dec 2002
Location: Keep true friends and puppets close, trust no-one else...
Posts: 93,787
Re: Will my UK Inheritance money be taxed in Australia
I have 90k GBP sat in my UK bank which I inherited from my Grandfather last year. I have been reluctant to transfer to Australia as I am a greedy cow who wants as many $$$$ as I can get and as we all know the exchange rate isn't that flash just now.
Someone got me worried this week because they told me that because I didn't bring it within 6 months of receiving it that I would be taxed on it here in Australia.
Anyone know if this is indeed the case.
Much appreciated in advance.
Someone got me worried this week because they told me that because I didn't bring it within 6 months of receiving it that I would be taxed on it here in Australia.
Anyone know if this is indeed the case.
Much appreciated in advance.
#3
Re: Will my UK Inheritance money be taxed in Australia
No you don't get taxed on it by Australia. This urban myth has been around for some time, but is exactly that. It's your money and you can exchange it whenever you want. Technically you have to declare the no doubt massive amount of interest you receive whilst its sat in a UK bank account on your Australian tax return but thats it.
Purely for interests sake - the money you inherited would be have been dealt with by probate in the UK and thus any tax that would have been payable by the deceased estate there to the Revenue would have been.
In Australia there is no inheritance tax.
Purely for interests sake - the money you inherited would be have been dealt with by probate in the UK and thus any tax that would have been payable by the deceased estate there to the Revenue would have been.
In Australia there is no inheritance tax.
#4
Lost in BE Cyberspace
Joined: Oct 2005
Location: Hill overlooking the SE Melbourne suburbs
Posts: 16,622
Re: Will my UK Inheritance money be taxed in Australia
I have 90k GBP sat in my UK bank which I inherited from my Grandfather last year. I have been reluctant to transfer to Australia as I am a greedy cow who wants as many $$$$ as I can get and as we all know the exchange rate isn't that flash just now.
Someone got me worried this week because they told me that because I didn't bring it within 6 months of receiving it that I would be taxed on it here in Australia.
Anyone know if this is indeed the case.
Much appreciated in advance.
Someone got me worried this week because they told me that because I didn't bring it within 6 months of receiving it that I would be taxed on it here in Australia.
Anyone know if this is indeed the case.
Much appreciated in advance.
#5
Auntie Fa
Joined: Nov 2006
Location: Seattle
Posts: 7,344
Re: Will my UK Inheritance money be taxed in Australia
Thanks for posting this, NB. Just applied for Probate re. my mother's finances and trying to work out the best way to keep the money in savings/PIPs (where it is currently) for my nieces without being penalised, so it's very topical.
Alternatively, anybody know anything about putting money in trust in the UK? e.g., would it affect their student grants? Sister is a single parent with no maintenance being paid, and the eldest has just finished her A levels. Hoping she might get some help with finance as her small inheritance wouldn't even keep her for the first year.
edit: Of course I will get professional advice but the allegedly professional advice my mother got a year ago seems to have been a bit off.
Alternatively, anybody know anything about putting money in trust in the UK? e.g., would it affect their student grants? Sister is a single parent with no maintenance being paid, and the eldest has just finished her A levels. Hoping she might get some help with finance as her small inheritance wouldn't even keep her for the first year.
edit: Of course I will get professional advice but the allegedly professional advice my mother got a year ago seems to have been a bit off.
#6
Account Closed
Joined: Jun 2005
Posts: 9,316
Re: Will my UK Inheritance money be taxed in Australia
I have 90k GBP sat in my UK bank which I inherited from my Grandfather last year. I have been reluctant to transfer to Australia as I am a greedy cow who wants as many $$$$ as I can get and as we all know the exchange rate isn't that flash just now.
Someone got me worried this week because they told me that because I didn't bring it within 6 months of receiving it that I would be taxed on it here in Australia.
Anyone know if this is indeed the case.
Much appreciated in advance.
Someone got me worried this week because they told me that because I didn't bring it within 6 months of receiving it that I would be taxed on it here in Australia.
Anyone know if this is indeed the case.
Much appreciated in advance.
Technically if you move it after 12 months you could be subject to tax on any gains made from the exchange rate. But practically the ATO has it's head in the clouds about this so if you don't declare the gain I doubt if anyone will pick it up. If they do pick it up then just say it wasn't clear.
As always the interest earned in the UK is taxable and any tax paid in the UK can be claimed as a tax credit.
The 6 month rule is one that applies to pensions.
#7
Re: Will my UK Inheritance money be taxed in Australia
Thanks for posting this, NB. Just applied for Probate re. my mother's finances and trying to work out the best way to keep the money in savings/PIPs (where it is currently) for my nieces without being penalised, so it's very topical.
Alternatively, anybody know anything about putting money in trust in the UK? e.g., would it affect their student grants? Sister is a single parent with no maintenance being paid, and the eldest has just finished her A levels. Hoping she might get some help with finance as her small inheritance wouldn't even keep her for the first year.
edit: Of course I will get professional advice but the allegedly professional advice my mother got a year ago seems to have been a bit off.
Alternatively, anybody know anything about putting money in trust in the UK? e.g., would it affect their student grants? Sister is a single parent with no maintenance being paid, and the eldest has just finished her A levels. Hoping she might get some help with finance as her small inheritance wouldn't even keep her for the first year.
edit: Of course I will get professional advice but the allegedly professional advice my mother got a year ago seems to have been a bit off.
#8
Auntie Fa
Joined: Nov 2006
Location: Seattle
Posts: 7,344
Re: Will my UK Inheritance money be taxed in Australia
(To be more accurate, I applied for Probate - as demanded by the bank -on my father's behalf as I would have had to attend an interview in the UK and needed to get back to Oz. In fact I only initially went over for a wedding )
#9
BE Enthusiast
Joined: Sep 2008
Location: newbury
Posts: 943
Re: Will my UK Inheritance money be taxed in Australia
Wonder if thats just a version of the common (but wrong) belief that you have to move any money within 6 months of arriving, or be taxed on it? I would imagine it would be treated like house sale money etc, and you'd get taxed only on any gain since you inherited the money, but I'd be intereeted to hear the official view.
#10
Re: Will my UK Inheritance money be taxed in Australia
Yes, unfortunately she didn't make a Will, intended the money to go to the girls as they each turned 21 but was advised to keep it in her own name. There may be a good reason for that but I spoke to her FA/bank 3 times, including face to face, and couldn't seem to find one.
(To be more accurate, I applied for Probate - as demanded by the bank -on my father's behalf as I would have had to attend an interview in the UK and needed to get back to Oz. In fact I only initially went over for a wedding )
(To be more accurate, I applied for Probate - as demanded by the bank -on my father's behalf as I would have had to attend an interview in the UK and needed to get back to Oz. In fact I only initially went over for a wedding )
#11
Auntie Fa
Joined: Nov 2006
Location: Seattle
Posts: 7,344
Re: Will my UK Inheritance money be taxed in Australia
Personally I think the bank has cocked up. They knew my mother's intentions, i.e., to split the money between her grandkids, and that she was still legally married, but for some reason they set up separate accounts in her name. It was her responsibility to check this but she never was good with money - she really should have written a will, too. I did talk to her about it at the time she sold the house but she seemed to think it was all covered by what she'd done at the bank. I'd put the whole amount on her not reading the statements (Oh the perils of being so far away.)
So it will all go to Dad initially, although we are all in agreement on who will eventually get it. I'm just trying to work out what to do with it until the girls turn 21, which was the age my Mum wanted them to have it. The bank says my father can cash in the plans or keep them running; they do seem to be performing very well. Whose name they should go into, and any penalties (e.g., girls' grants, my UK tax implication) is currently the great unknown.
#12
Re: Will my UK Inheritance money be taxed in Australia
By rights he does, even though they have been separated a very long time, but the bank requested we go to Probate and, according to the Probate helpline, they are entitled to do so.
Personally I think the bank has cocked up. They knew my mother's intentions, i.e., to split the money between her grandkids, and that she was still legally married, but for some reason they set up separate accounts in her name. It was her responsibility to check this but she never was good with money - she really should have written a will, too. I did talk to her about it at the time she sold the house but she seemed to think it was all covered by what she'd done at the bank. I'd put the whole amount on her not reading the statements (Oh the perils of being so far away.)
So it will all go to Dad initially, although we are all in agreement on who will eventually get it. I'm just trying to work out what to do with it until the girls turn 21, which was the age my Mum wanted them to have it. The bank says my father can cash in the plans or keep them running; they do seem to be performing very well. Whose name they should go into, and any penalties (e.g., girls' grants, my UK tax implication) is currently the great unknown.
Personally I think the bank has cocked up. They knew my mother's intentions, i.e., to split the money between her grandkids, and that she was still legally married, but for some reason they set up separate accounts in her name. It was her responsibility to check this but she never was good with money - she really should have written a will, too. I did talk to her about it at the time she sold the house but she seemed to think it was all covered by what she'd done at the bank. I'd put the whole amount on her not reading the statements (Oh the perils of being so far away.)
So it will all go to Dad initially, although we are all in agreement on who will eventually get it. I'm just trying to work out what to do with it until the girls turn 21, which was the age my Mum wanted them to have it. The bank says my father can cash in the plans or keep them running; they do seem to be performing very well. Whose name they should go into, and any penalties (e.g., girls' grants, my UK tax implication) is currently the great unknown.
#13
Re: Will my UK Inheritance money be taxed in Australia
By rights he does, even though they have been separated a very long time, but the bank requested we go to Probate and, according to the Probate helpline, they are entitled to do so.
Personally I think the bank has cocked up. They knew my mother's intentions, i.e., to split the money between her grandkids, and that she was still legally married, but for some reason they set up separate accounts in her name. It was her responsibility to check this but she never was good with money - she really should have written a will, too. I did talk to her about it at the time she sold the house but she seemed to think it was all covered by what she'd done at the bank. I'd put the whole amount on her not reading the statements (Oh the perils of being so far away.)
So it will all go to Dad initially, although we are all in agreement on who will eventually get it. I'm just trying to work out what to do with it until the girls turn 21, which was the age my Mum wanted them to have it. The bank says my father can cash in the plans or keep them running; they do seem to be performing very well. Whose name they should go into, and any penalties (e.g., girls' grants, my UK tax implication) is currently the great unknown.
Personally I think the bank has cocked up. They knew my mother's intentions, i.e., to split the money between her grandkids, and that she was still legally married, but for some reason they set up separate accounts in her name. It was her responsibility to check this but she never was good with money - she really should have written a will, too. I did talk to her about it at the time she sold the house but she seemed to think it was all covered by what she'd done at the bank. I'd put the whole amount on her not reading the statements (Oh the perils of being so far away.)
So it will all go to Dad initially, although we are all in agreement on who will eventually get it. I'm just trying to work out what to do with it until the girls turn 21, which was the age my Mum wanted them to have it. The bank says my father can cash in the plans or keep them running; they do seem to be performing very well. Whose name they should go into, and any penalties (e.g., girls' grants, my UK tax implication) is currently the great unknown.
Last edited by Bermudashorts; Aug 7th 2010 at 4:41 pm.
#14
Account Closed
Joined: Jun 2005
Posts: 9,316
Re: Will my UK Inheritance money be taxed in Australia
By rights he does, even though they have been separated a very long time, but the bank requested we go to Probate and, according to the Probate helpline, they are entitled to do so.
Personally I think the bank has cocked up. They knew my mother's intentions, i.e., to split the money between her grandkids, and that she was still legally married, but for some reason they set up separate accounts in her name. It was her responsibility to check this but she never was good with money - she really should have written a will, too. I did talk to her about it at the time she sold the house but she seemed to think it was all covered by what she'd done at the bank. I'd put the whole amount on her not reading the statements (Oh the perils of being so far away.)
So it will all go to Dad initially, although we are all in agreement on who will eventually get it. I'm just trying to work out what to do with it until the girls turn 21, which was the age my Mum wanted them to have it. The bank says my father can cash in the plans or keep them running; they do seem to be performing very well. Whose name they should go into, and any penalties (e.g., girls' grants, my UK tax implication) is currently the great unknown.
Personally I think the bank has cocked up. They knew my mother's intentions, i.e., to split the money between her grandkids, and that she was still legally married, but for some reason they set up separate accounts in her name. It was her responsibility to check this but she never was good with money - she really should have written a will, too. I did talk to her about it at the time she sold the house but she seemed to think it was all covered by what she'd done at the bank. I'd put the whole amount on her not reading the statements (Oh the perils of being so far away.)
So it will all go to Dad initially, although we are all in agreement on who will eventually get it. I'm just trying to work out what to do with it until the girls turn 21, which was the age my Mum wanted them to have it. The bank says my father can cash in the plans or keep them running; they do seem to be performing very well. Whose name they should go into, and any penalties (e.g., girls' grants, my UK tax implication) is currently the great unknown.
However there is (or was when I was there) another rule around IHT which allows you to give away as much money as you want as long as you survive 7 years after you make the gift. If you didn't survive the 7 years then there was the possibility of some tax (although none if the total estate was less than the IHT threshold).
With trusts you have to be wary of trust tax. You can have an adult hold the money for the benefit of the girls but I don't know if they then have legal claim to it when they are 18.
#15
Auntie Fa
Joined: Nov 2006
Location: Seattle
Posts: 7,344
Re: Will my UK Inheritance money be taxed in Australia
Thanks, guys. We'd already made a call to our Oz accountant but I think I need to get one in the UK, too. (I haven't even done a UK tax return for a couple of years as I no longer own property there.)
The total estate is definitely under the IHT threshold of 325k and I will look into trusts very carefully.
At the risk of sounding morbid (or worse still, a vulture) I suspect I'll be going through this again soon with my Dad, so I'd like to get it as much in order this time as possible. Along with a list of things I needed him to look into once I'd left, I left him a 3" high note, "Make a bloody WILL"
The total estate is definitely under the IHT threshold of 325k and I will look into trusts very carefully.
At the risk of sounding morbid (or worse still, a vulture) I suspect I'll be going through this again soon with my Dad, so I'd like to get it as much in order this time as possible. Along with a list of things I needed him to look into once I'd left, I left him a 3" high note, "Make a bloody WILL"