Inheritance Tax Recommendations for Dual Citizens

US and UK passport

It can be quite complicated for dual citizens who are receiving an inheritance from overseas. Many times, the citizen will need to transfer that money back to cover expenses. That said, if this transfer is not completed in the proper way, it can end up costing much more due to excessive fees. If you are considering possible ways to save capital when transferring inheritance to either the US or UK from abroad, then review the information discussed below.

What Kind of Taxes Will Be Incurred in the UK

In terms of inheritance tax in the UK, there is a way to cut costs with certain circumstances. For example, if an a dual Australian/UK citizen received inheritance in Australia and wanted to move the capital to the UK to make a real estate investment, they would pay no inheritance tax in Australia. For the UK, you will not be charged tax since it is assumed that you already paid Estate Tax. That said, you may receive taxation on the interest received since you inherited your inheritance since the UK taxes on worldwide income and that interest would be calculated as your worldwide income.

What Kind of Taxes Will Be Incurred in the US

The United States has a very clear stance on dual citizen inheritance taxation. There are two taxes that need to be considered when trying to see whether the inheritance of a dual citizen will be taxed. The first tax is an Estate Tax. If the parents leave their child an inheritance that is under $10,500,000 assets that they own, then there will be no Estate Tax. The second potential tax comes from Section 2801 from the Internal Revenue Code, which states that the person leaving the inheritance must be an expatriate and the individual receiving it must be a U.S. Citizen. If the parents are also dual citizens, for example, then the Section 2801 tax will not be applied either.

How Using a Money Transfer Company Can Help

Transferring your inheritance back to the US or UK can be complicated and costly due to currency conversions; however, using a money transfer company can cut the cost considerably. Money Transfer Companies can offer preferential rates that target when the exchange rate is at its best to make a large transfer. When dealing with large amounts of capital, it is important to keep this in mind as it has the potential to save thousands of dollars on foreign conversion fees. In addition to transferring inheritance between jurisdictions, Money Transfer Companies can also help when making large real estate purchases or moving assets to start a business in a foreign country. Be sure to keep this in mind as a way to cut your transactional costs.

Concluding Remarks on the Subject

Since the number of dual citizenship has risen and family members can be found living in many diverse parts of the globe, it is important to be aware of the requirements in international taxation. For those that avoid these regulations, it is possible to receive a sizeable tax bill that can be devastating financially. The more careful that you are with using the international tax regulations to your advantage, the better off you will be in the long term. In terms of transferring your inheritance to the US and UK, be aware that these two jurisdictions have some of the most complex taxation regulations in the world. When trying to understand these jurisdictions, it is highly recommended to consult an expert law firm with a niche in international taxation and a money transfer company in order to save a great deal on transferring your inheritance to another jurisdiction. By utilizing these two options, you will be thrilled at the capital you will save.

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