Tax on repratriating overseas inheritance?

Question

I used to live in the UK (and a UK citizen) and received a large inheritance. I left the £££ in the UK and moved to the US where I now live (and now also a US citizen). If I want to bring back the £££ into the US, what taxes do I owe? Will I owe any tax on the inheritance? Or is tax strictly limited to the interest earned on the inheritance? No interest has ever been reported to the US.

Answer 1

You will not owe U.S. estate tax on the inheritance.

Since you are now a U.S. citizen, you do owe income tax on the interest it earned whether it is in the U.S. or not.

Answer 2

The location of the money is irrelevant for US tax purposes. The original amount of the inheritance is not taxed to you.

When you became a US resident or citizen, the income on the inheritance was taxable and should have been reported. If you also paid UK tax, you could have received a dollar for dollar credit for taxes paid to the UK.

The proper way to correct this is to amend your US tax returns for the years you had income on this inheritance.

Moving money from the UK to the US itself will not trigger any tax.

Answer 3

You don't owe any tax on the inheritance itself. However any interest earned on it is fully taxable to you, beginning from when you became a US resident (not a citizen!) Any interest that accrued prior to taking up US residency is not taxable by the US.

You need to file amended returns for the years that interest was earned after you took up US residency and pay any tax due along with any penalties and interest on the overdue taxes.

Answer 4

Inheritance isn't taxable in Canada, however the activity earned from the inheritance is taxable. mutually as you have been given the legal and advantageous activity interior the account in 2002, you had the advantageous activity in it in past years inspite of the very shown fact that verbally. For tax applications, advantageous activity esp in writing trumps over legal call, meaning you need to have suggested the activity of pre-2002 years besides. interior the traditional path, a taxpayer who has no longer filed in any respect would be required to document for 7 years, which contain the present 3 hundred and sixty 5 days, and that a taxpayer who has filed yet did no longer completely declare, would be required to document for below years that are no longer in any different case statute barred. Subsection 152(4) frequently restricts the CRA from reassessing a return of earnings for a tax 3 hundred and sixty 5 days this is previous 3 years from the date of the unique know evaluation or of an unique notification that no tax become payable for the three hundred and sixty 5 days. while the traditional 3-3 hundred and sixty 5 days reassessment era for a tax 3 hundred and sixty 5 days ends, the return is seen statute-barred. despite the fact that, CRA would use the very fact of the disclosure to open, audit and consider statute barred years, below the authority of subparagraph 152(4)(a)(i), which states that the Minister would examine tax, activity or effects, after the taxpayer's ordinary reassessment era (3 yrs for many taxpayers) in comprehend of the three hundred and sixty 5 days given that the taxpayer : (i) has made any misrepresentation this is by using overlook, carelessness or wilful default or has committed any fraud in submitting the return or in providing any guidance below this Act. on the least, i'd propose you to amend your final 3 yrs returns to checklist the activity earnings, earlier the CRA catches you and applies the effects.