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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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INHERITANCE TAX I am resident in UK but have an Italian

Resolved Question:

INHERITANCE TAX
I am resident in UK but have an Italian Nationality, my father has died last year, he was resident in Switzerland and Italian nationality, he left some assets: a home in Switzerland and a property in Italy.
I have paid inheritance taxes on the properties (together with my only brother) in Italy already.
What is my position regarding UK Inheritance tax?
Do I need to declare anything in the UK as I have declared everything already in Italy?
Do I owe anything in the UK?
Do I need to supply any documents here in the UK?
Thanks in advance for your time and attention
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question...If your late father's estate has settled inheritance tax in Italy and you are a beneficiary of the estate, you have no liability to UK tax authorities as far as inheritance tax is concerned.Your father was non resident in the UK for tax purposes and there were no assets of his in the UK.You don't have to report anything to the UK authorities. You may wish to retain the documents for your future in the event you are required tosupport remittance of these funds to the UK. I hope this is helpful and answers your question. If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 1 year ago.
Thank you for your quick reply,my father was NOT a UK resident and did not leave me anything in the UK.So if I already have declared all and paid tax in Italy (and Switzerland) I do not have to declare it here in the UK.
Does the same apply for cash? As some cash was left as well as assets.
I was just concerned that if some money will be transferred to my UK accounts that I should not get taxed on them, or have to declare them somehow.. I am aware that if I were to invest my cash here and earn interest I would have to pay tax on that of course.So for legal purposes if my parents are not UK residents and I am still an Italian citizen, even thought I have residency in the UK all Inheritance tax matters would be settled in Italy?many thanks againMassimo
Expert:  taxadvisor.uk replied 1 year ago.
Massimo, thanks for your detailed response.Your understanding is correct.. your parents are non domicled in the UK for tax purposes and don't have any assets/bank accounts in the UK. Their IHT related matters would be settled in Italy.You being a UK resident and presuming you pay taxes on your income arising worldwide would pay tax on any income you receive or capital gain you make but not on transfer of capital/savings from Itlay to the UK.You may wish to read page 10 of RDR1 herehttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/464664/RDR1_FB15_updates_RB_and_CGT.pdfI hope this is helpful and answers your question.
Customer: replied 1 year ago.
Thanks again,now my last question (I hope)My dad also left a property which is rented out and I would receive half of that rent in Italy, I am planning to also declare that rent in Italy and pay taxes in Italy for that. Is that allowed, or should I not pay tax in Italy and declare it here. I also do not see how I can NOT pay income tax in Italy if the property is there as I would have to pay property tax (IMU) in Italy like charges and tax on the actual property itself . I realised I typed Italy a lot :-)thanks againMassimo.
Expert:  taxadvisor.uk replied 1 year ago.
Thanks for your reply.You should declare rental income in Italy and pay local taxes there.As UK resident you are normally taxed on your worldwide income and that would include rental income in Italy. If you suffer any tax on that income in Italy, you claim foreign tax credit relief on that income when you declare it on your tax return to UK authorities. Under Double tax agreement between the two countries you are not taxed twice on that same income.More information on how/where to declare foreign rental income can be found here (SA106-Foreign)https://www.gov.uk/government/publications/self-assessment-foreign-sa106I hope this is helpful and answers your question.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4787
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Expert:  taxadvisor.uk replied 1 year ago.
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