In our globalised world, families are often spread across different countries, cultures, and legal frameworks. A loved one may have lived overseas, owned property abroad, held money in a foreign bank account, or named beneficiaries who live in Scotland or elsewhere in the UK. When that happens, receiving inheritance from abroad can feel far less straightforward than a domestic estate.
So, what happens if you inherit money from another country?
The answer depends on several factors, including where the person who died lived, where their assets are located, whether tax has already been paid overseas, and whether the estate also needs to be dealt with under Scottish or UK procedures.
The good news is that, with the right advice, cross-border estates can be managed in a clear and practical way. This guide explains how receiving inheritance from overseas usually works, what UK tax issues may arise, and why early legal advice can make a significant difference.
What makes inheritance from abroad different from inheriting domestically?
When an estate is entirely based in Scotland, the process will usually involve identifying the assets, valuing the estate, dealing with inheritance tax where relevant, applying for confirmation, paying debts, and distributing the estate to beneficiaries.
With an international estate, there is another layer of complexity: more than one legal system may be involved.
For example, the person who died may have:
- lived abroad but owned property or bank accounts in the UK;
- lived in Scotland but owned a holiday home, investments, or savings overseas;
- had beneficiaries living in different countries;
- made a will in one country but held assets in another;
- died without a will, meaning intestacy rules may need to be considered in more than one jurisdiction.
This is where cross-border inheritance law becomes important. Different countries can have different rules on who inherits, how executors or personal representatives are appointed, what documents are needed, and when tax must be paid.
In Scotland, executors usually apply for confirmation, rather than probate, when dealing with a deceased person’s estate. But, if assets are held overseas, local probate or succession procedures in that country may also be required.
International probate can be more complicated and time-consuming than ordinary executry and confirmation because it requires an understanding of how UK inheritance tax works and Scottish law, as well as the laws, taxes, and procedures of the country where the assets are held.
Who pays the tax on overseas inheritance?
In many cases, inheritance tax is dealt with by the estate before money or assets are distributed to beneficiaries. However, this is not always the end of the matter.
If you are receiving inheritance from abroad, the key questions usually include:
- Was inheritance tax, estate tax, or a similar tax payable in the country where the deceased lived?
- Does the UK also have a right to tax any part of the estate?
- Are the assets UK-based, overseas, or both?
- Has the same asset been taxed twice?
- Will you receive money only, or will you inherit property, shares, or investments that may later produce income or gains?
As a beneficiary, you do not usually pay UK Income Tax or Capital Gains Tax immediately on inherited money or shares. However, you may have tax to pay later on income produced by the inheritance, such as interest or dividends, or on gains if you later sell inherited assets that have increased in value since the date of death.
This distinction is important, as receiving an inheritance is one thing; earning income from it or selling inherited assets later is another.
UK tax implications on inheritance from overseas
The UK tax position depends heavily on the facts of the estate. There is no single rule that applies to every overseas inheritance.
For deaths from 6 April 2025, the UK’s inheritance tax rules moved away from the old domicile and deemed domicile framework and introduced a long-term UK residence test. HMRC states that, from that date, if a person is a long-term UK resident, their non-UK assets may be subject to UK Inheritance Tax when they die or make a transfer of assets. A person is generally treated as a long-term UK resident if they were UK tax resident for either the previous 10 consecutive years or for 10 or more of the previous 20 tax years.
This matters because an estate may include foreign assets, but those assets may still fall within the UK inheritance tax net depending on the deceased person’s UK residence position.
Where the person who died was based outside the UK, UK Inheritance Tax may still apply to UK assets, such as property or bank accounts in the UK. HMRC guidance explains that if someone is based abroad, Inheritance Tax is paid only on UK assets, subject to the relevant rules and exclusions.
In practice, this means the tax position may turn on three broad issues:
- The deceased person’s UK residence or domicile position, depending on the date of death and applicable rules.
- Where the assets are situated, such as UK property, overseas property, foreign bank accounts, or international investments.
- Whether another country has also taxed the same assets, creating a possible double taxation issue.
For beneficiaries, the concern is often simple: “Will I lose part of my inheritance to tax twice?” Fortunately, there may be reliefs available.
Double taxation treaties and reliefs
Double taxation can arise where both the UK and another country seek to tax the same estate, gift, or asset.
The UK has double taxation conventions with a number of countries for estate, gift, and inheritance taxes. HMRC explains that these treaties are designed to help prevent the same property from being taxed in both the UK and another country.
The UK currently lists conventions for countries including the Republic of Ireland, South Africa, the USA, the Netherlands, Sweden, and Switzerland, with older Estate Duty-era treaties also applying to France, Italy, India, and Pakistan under different rules.
Where there is no double taxation convention, unilateral relief may still be available. HMRC guidance says that, where a transfer is liable to UK Inheritance Tax and also to a similar tax in a country without an agreement, credit may be available under unilateral relief provisions.
In plain English, this means that if tax has already been paid overseas, it may be possible to reduce the UK tax bill by claiming credit for some or all of that foreign tax. However, the relief is not automatic and is subject to detailed rules. The amount available can depend on the asset, the country involved, the type of tax paid, and whether the same asset is being taxed.
This is an area where professional advice is particularly important. A missed relief can mean too much tax is paid, and an incorrect claim can create delays or difficulties with HMRC.
Reporting an overseas inheritance to HMRC
Not every person receiving inheritance from overseas will need to make a separate report to HMRC. Much depends on the nature of the inheritance and the wider estate.
However, HMRC may need to be involved where:
- UK Inheritance Tax is payable;
- the estate does not qualify as an excepted estate;
- the deceased had foreign assets;
- the deceased lived outside the UK;
- foreign tax has been paid and relief is being claimed;
- inherited assets later produce income or gains for the beneficiary.
For example, form IHT400 is used as part of the probate or confirmation process where there is Inheritance Tax to pay or where the estate does not qualify as an excepted estate.
Where foreign assets are involved, additional schedules may be needed. HMRC states that IHT417 should be used with IHT400 if the deceased had a permanent home in the UK when they died but had assets outside the UK. If the deceased had their permanent home outside the UK, IHT401 may be relevant.
This is one reason international executry should be handled carefully from the outset. The information gathered at the beginning can affect tax reporting, confirmation, probate, and eventual distribution to beneficiaries.
How to transfer your inheritance from abroad to the UK
Once the estate has been administered and the beneficiary’s entitlement is clear, the next practical question is how the inheritance is actually transferred to the UK.
This may involve:
- closing or transferring funds from an overseas bank account;
- selling foreign property or investments;
- converting currency into sterling;
- satisfying local tax or probate requirements before funds are released;
- providing identity, anti-money laundering, and source of funds documents;
- ensuring the transfer is recorded properly for estate accounts and tax purposes.
The exchange rate can make a real difference to the final amount received. Transfer fees, bank charges, and timing can also affect the value of the inheritance by the time it reaches the UK.
Before moving funds, it is sensible to check:
- whether the estate has authority to distribute the money;
- whether all local taxes have been paid or accounted for;
- whether any UK tax reporting is still outstanding;
- whether the transfer creates any UK tax issue for the beneficiary;
- whether you need records showing where the money came from.
If you are receiving inheritance from abroad, keeping a paper trail is important. Bank statements, probate documents, tax receipts, currency exchange records, estate accounts, and correspondence with overseas professionals may all be useful later.
IHT forms
The forms needed will depend on where the deceased lived, where the assets are located, whether tax is due, and whether the estate qualifies as excepted.
In Scotland, form C1 is used to give an inventory of the estate and apply for confirmation where the person who died lived in Scotland. GOV.UK explains that the completed form is sent to the appropriate Sheriff Clerk or Commissary Office, with special arrangements for certain cases, including where the deceased was not domiciled in the UK.
Common inheritance tax and confirmation forms in international estates may include:
|
Form Type |
Purpose |
|
C1 Confirmation form |
Used in Scotland to apply for confirmation and provide an inventory of the estate. |
|
IHT400 Inheritance Tax account |
Used where Inheritance Tax is payable or the estate does not qualify as an excepted estate. HMRC states that IHT400 must be completed as part of the probate or confirmation process in those circumstances. |
|
IHT401 Domicile outside the United Kingdom |
Used with IHT400 if the deceased had their permanent home outside the UK when they died. |
|
IHT417 Foreign assets |
Used with IHT400 if the deceased had a permanent home in the UK when they died but had assets outside the UK. |
|
Double taxation relief information |
Where tax has been paid overseas on the same assets, evidence may be needed to support a claim for double taxation relief or unilateral relief. |
These forms can be technical, and mistakes may cause delays. In an international estate, the information needed may also come from foreign banks, lawyers, accountants, tax authorities, or land registries, which can take time to obtain.
How Neil Kilcoyne Solicitors can help
Receiving inheritance from overseas can be stressful, especially when you are grieving, dealing with unfamiliar paperwork, and trying to understand how tax rules apply across more than one country.
Neil Kilcoyne Solicitors can help make the process clearer.
Our international probate solicitors in Glasgow advise on complex estates involving foreign assets, overseas beneficiaries, inheritance tax issues, confirmation, probate, estate planning, bonds of caution, and related matters. Our award-winning firm has experience dealing with high-value, large, and complex international estates, and provides tailored advice based on each of our clients’ unique circumstances.
We can help you with:
- identifying and valuing UK and overseas assets
- advising executors on their duties
- applying for confirmation in Scotland
- liaising with overseas professionals where required
- considering UK Inheritance Tax and relevant HMRC forms
- helping beneficiaries understand the practical steps involved
- advising on double taxation relief where more than one country is involved
- guiding the estate through to distribution as efficiently as possible
International inheritance matters are rarely one-size-fits-all. The right approach depends on the countries involved, the assets in the estate, the terms of any will, and the tax position. Our role is to explain your options clearly, guide you tactically, and help carry the burden at what can be a difficult time.
Get in touch with our international probate solicitors
If you are an executor or beneficiary dealing with receiving inheritance from abroad, Neil Kilcoyne Solicitors can help you understand what needs to happen next.
Contact our international probate solicitors in Glasgow for clear, practical advice on cross-border inheritance, executry, confirmation, and inheritance tax matters. Call us on 0141 433 2700, email us at admin@kilcoyne-solicitors.co.uk, or fill out the form below to arrange a free, no-obligation consultation.
