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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15950
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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If a foreign national (non-UK resident) gifts a property to

Resolved Question:

If a foreign national (non-UK resident) gifts a property to a son or daughter who is a UK resident, and the property is located in the UK, do UK inheritance taxes apply to the estate?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.
The estate of a foreign national is liable to UK Inheritance Tax to the extent that the assets are UK based. So, the UK property is already part of your UK estate and will remain so for seven years after you give it away. If you die before the seven years are up, the value of the gift will form part of your UK estate for IHT purposes. Tapering applies after 3 years as you can read here:
http://taxaid.org.uk/guides/information/other-taxes-you-may-need-to-know-about/inheritance-tax/828-2/taper-relief-for-lifetime-gifts
If you live for at least seven years after the gift, then the property will have left your UK estate.
The gift is also a disposal for UK CGT purposes. From 6 April 2015, non-UK residents may be liable to CGT in the UK on gains made on the disposal of UK residential property. You can read about that here:
https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property
I hope this helps but let me know if you have any further questions.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 2 years ago.
Thank you Tony. Your reply was very helpful and clear. Best Wishes.
Expert:  TonyTax replied 2 years ago.
Thanks and good luck to you.