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TonyTax
TonyTax, Tax Consultant
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To Whom It May Concern I am a UK citizen and tax payer living

Resolved Question:

To Whom It May Concern
I am a UK citizen and tax payer living in the uk.
I am hoping to receive a considerable inheritance from China and was wondering what is the most tax efficient way of receiving this inheritance and what was my tax exposure?
I am considering opening an offshore account which would be used to deposit the inheritance.
I fully intend to declare my offshore account to the inland revenue, however am I correct in my understanding that I will not be required to pay any tax on my inheritance, but only on interest gained from the account, plus also any money which I bring into the UK from this account, or any property which I might decide to purchase in the uk?
Also can you advise what is the best place to,open an offshore account and can I open it from an agent bank in the uk?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.I cannot advise you on the precise details of opening offshore accounts but all the UK banks have offshore facilities and you would be able to open an account from within the UK. Take a look here for information on UK Inheritance Tax. Assuming the individual who you inherited from was non-UK domiciled and the inheritance is not made from UK based assets, there can be no IHT under any circumstances. Cash held in UK banks but in a foreign currency denominated bank account does not count as a UK asset for a non-domiciled individual. Recipients of gifts or inheritances do not normally pay tax on them in the UK but the income and gains generated from them is taxable in the UK, assuming the recipient is UK tax resident and a UK national by birth. A non-UK domiciled but UK tax resident individual will have the choice to use the remittance basis of assessment which means that they can choose to pay UK tax on UK source income and non-UK source income and gains they bring into the UK. Take a look at sections 5 and 9 of RDR1 here for information on domicile and the remittance basis of assessment. I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Hello
Just to clarify, I am a uk resident and born in the uk.
Therefore am I correct in understanding that I will not pay tax on the inheritance, but only on the interest gained from the offshore deposit account?
What are the benefits of opening an offshore account? I
Expert:  TonyTax replied 1 year ago.
You won't pay UK tax on the inheritance.

I cannot give you financial advice I'm afraid.

Due to the tax regimes in offshore tax havens, rates of interest can be higher and is usually paid gross. As a UK resident and UK national you will need to declare any offshore income to the UK tax authorities.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15840
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Just one part of the question not answered.
If a buy a property in the uk, using funds from my inheritance, do I have to pay tax?
Expert:  TonyTax replied 1 year ago.
No, you don't. You can spend it on whatever you want.

If you let the property, any rental income will be taxable.
Customer: replied 1 year ago.
Many Thanks
Expert:  TonyTax replied 1 year ago.
Thanks.

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