My daughter, who now lives in the USA, has inherited some money from her grandmother in the UK. It is approx £25k.

Will she be liable for any tax when it gets transferred to her USA bank account?


1 Answer 1


No. In the US inheritances are taxed through what is called "estate tax", and it is the estate that pays it. Since in this case the estate is foreign and (assuming) not under the US jurisdiction - there's no US taxes. The heir/recipient is not taxed however there are reporting requirements that kick in when the values reach $100K - your daughter is below that threshold, so no need to even report it.

If, in order to receive it, your daughter ends up needing a bank account in the UK - there would be an FBAR reporting requirement. If the inheritance is delivered directly to her in the US then no need.

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    This explains that no taxes are due in the US. Do you know whether any taxes are due in the UK?
    – quarague
    Apr 19, 2023 at 9:30
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    @quarague – in the UK inheritance tax is paid by the estate, similar to the answer above. There are additional taxes that most people resident in the UK are liable for, income tax and capital gains tax. These apply to inheritances too – so if you inherit e.g. shares that pay a dividend you pay income tax on that, or inherit a classic car, keep it for 20 years, and sell it you pay tax on the gain – but are not applicable for people not resident for tax purposes in the UK.
    – Landak
    Apr 19, 2023 at 10:29
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    This is one of the areas of the tax code I find particularly offensive since the person who generated the inheritance likely paid taxes on the income used to fund the inheritance in the first place it always feels like double taxation. Apr 19, 2023 at 12:51
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    It is double taxation. Not all taxes are primarily about generating revenue for the state (though that's always a secondary benefit of any tax). Some taxes are designed to discourage certain behaviors, and the behavior being discouraged in this case is "hoarding" wealth to do nothing with it except pass it down from one generation to the next. In the US, at least, there is a rather generous exemption (it was recently raised from "only" $5 million to $11 million).
    – chepner
    Apr 19, 2023 at 13:11
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    @MarkSchultheiss It's also a tax that only affects people with substantial wealth to inherit, which tend to be people that have gotten a lot of advantage from society, versus, say, a sales tax or VAT that takes a disproportionate share of tax from people with lower incomes. Apr 19, 2023 at 14:52

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