My mother recently passed away after a short battle with cancer. She has left her estate to myself and my two sisters in her will. We have hired a solicitor, who also handled her will, to help us with probate. He said that the monies will be put into on big pot that will be divided equally between us 3 siblings.

Being a dual national, with US/UK citizenship what are the tax implications. The solicitor said that that I could either do an international wire transfer to a US bank or open a bank in the UK. Just trying to figure out whether the USA would tax this inheritance. Her whole estate will just come under the UK inheritance limit of 325,000 pounds.

Has anyone had any experience with how the IRS would handle this?

I was in a similar position when my mother died in England in 2006. I filed IRS Form 3520. There was no tax due.
http://www.irs.gov/businesses/articl...200722,00.html
http://www.irs.gov/pub/irs-pdf/i3520.pdf

+1. Whoever is probating the will and handling any taxes due in the UK will give you an HM Revenue form R185 entitled Statement of Income from Estates for your records. While my mother's estate was being probated, the money in the bank accrued some interest. I was advised by the probate accountant what amount this was so that I could declare it on my US tax return and how much UK tax had been paid on it. The actual inheritance was not taxable in the US -- the IRS form 3520 is a report, rather than a tax return.

Interesting stuff as I'm in the same position. I had been advised by the UK end there would be no taxes on the inheritance payable here in the USA but a form (IRS 3520) would be needed. Still waiting on Grant of Probate.

Sorry to read of your loss

Plus one

Thanks for all your replies and condolences.

This has been one of the most hardest things to deal with since I loved my mother. It was hard to be in the USA when she was so far away, at least we talked every week even the day before she died.

My sisters are having a hard time dealing with her death as they watched her painful death in hospital. I believe my mother wanted to spare me this as she died just as I was leaving the USA. It would have destroyed me emotionally if I had to see her in hospital dying.

Will be back over there at the end of Sept to help my sisters spread her ashes and assist with the estate.

Condolences from me as well. I know exactly how you feel. In my case I made it back in time to be able to talk with my mother face-to-face before she died. I went back again for the ashes spreading and once G of P is done I'll have to go back to clear out her house. It is difficult dealing with everything being 4000 miles away.