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Level 1
posted Nov 16, 2022 1:30:10 PM

Foreign home will go for our kids inheritance

I am on a will for parents home/property in a foreign country (India and UK).  Am I liable for any taxes if I plan to sell after their death. Thanks.

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2 Replies
Employee Tax Expert
Nov 16, 2022 5:09:42 PM

There is no tax when the inheritance is received. When you sell the property you will need to report the gain or loss on that property.  The basis is the value at the date of death of your parents. The one additional item is that if you pay any foreign tax on the sale, you may get a credit for the taxes paid.

Employee Tax Expert
Nov 16, 2022 5:10:14 PM

In the UK, you do not pay Stamp Duty, Income Tax or Capital Gains Tax immediately if you inherit a property.  You will pay taxes on the profit or gain when you sell the property.

 

The same applies for India, when the property is sold, tax will be due on the gain of the sale.  The holding period (period for which the property was held by you and the deceased) will determine if capital gains will come under long-term capital gains tax or short-term capital gains tax.  To qualify for a long term capital gain in India, you must hold the asset for more than 24 months but that holding period includes the holding period for the decedent as well. 

 

So inherited property, in both India and the UK will be subject to capital gains tax in the according country when sold.