I am about to receive an inheritance of around £60,000 from a will in the US. Will I have to pay anything to receive the money or pay any tax on it?
I would expect that the estate of the person who died will have paid any tax due in the US. You may wish to clarify that the amount stated will be net of all legal costs and estate taxes.
Once you’ve inherited the funds, they will then become liable to three UK taxes. First, you will have to pay income tax on any profits you later earn from the money.
Second, capital gains tax on growth if you sell investments in the future. Finally, inheritance tax when you die and hand the money on to someone else if your estate is worth more than the inheritance tax threshold.
You may also incur transfer charges when the money is being transmitted to the UK from the holding US bank. This will depend on the arrangement between the US attorney and the US Bank. The US bank may require ID or certification of ID from a UK solicitor before sending the money.
You may also wish to inform your bank that the money is due into your account.This will provide it with proof of the source as UK banks have been known to freeze bank accounts when large sums of money have been received from abroad without prior notification.
Your bank in the UK may charge to receive the money. Charges may be explicit but they may also be hidden within the exchange rate being used, so you may wish to check this with your bank.
One further consideration is that until you receive the funds, the value of your inheritance could be impacted by fluctuating foreign exchange rates. Sterling has weakened again the dollar since Brexit, which is an advantage in your situation. However, exchange rates continually change, so the value of your inheritance could end up being higher or lower than you expect.