Taxes on an Overseas Inheritance
Different countries will have different inheritance tax laws, so it is best to consult with a professional tax advisor for complete guidance on what you will owe, if anything. Whether you are inheriting property, stocks, or a bank account, knowing the tax implications for overseas inheritances will be crucial.
If you live in Australia, for example, and you receive an inheritance from abroad, you will not be required to pay additional taxes unless the executor has specified that you have to.2,3 However, you will end up paying income tax on any investments that you make using that inheritance, and there are some financial transactions that could also be taxed.
When living in the United States, as another example, you will have to declare assets that you receive from abroad. Federal and state estate taxes might also apply, though there are exceptions.4,5 For more detailed information, consult our Guide to Repatriating an Overseas Inheritance.
On the other hand, if you are a resident of the United Kingdom, whether or not you will be required to cover the inheritance tax will actually depend upon where the deceased was domiciled. Other factors, such as where the assets are located, whether they are considered excluded assets, or if they are part of a trust, will also determine if you owe taxes.6