[Closed] Inheritance money in UK for expat

Have a look at the transfer rates from Wise, in the scheme of things it shouldn't be that much 🤔

It reads like your son lives in the UK, and its a UK estate? I don't see why you can't just open some account/trust fund or something in the UK, but if the son is in Austria, then you'll always have to pay a fee for the currency exchange, wheather you do that now or in 10 years time, as you'll be paid in £.

It seems like we may need to get the money transferred to Austria and take the hit on the transfer/exchange.

You must have a lot of faith in the pound to want to leave the money in the UK. Have a look at the long term exchange rate trend, now doesn't seem a bad time to take money out. Make sure you know which bits of paper to fill in to avoid paying inheritance tax in both countries assuming you're registered for tax in Austria.

The 'son' part is a red herring, you've inherited it not him.

Either have it transferred to an account in your name in the UK, or one in Austria with a conversion 'hit' - although could you open a Sterling account in Austria?

The ‘son’ part is a red herring, you’ve inherited it not him.

Not really it's quite possible as the beneficiary of a will to effectively re-write the will so that someone else benefits, completely legal and done quite often.

Not really it’s quite possible as the beneficiary of a will to effectively re-write the will so that someone else benefits, completely legal and done quite often.

It is, but the executors will have have a cost attached to doing this, probably an additional solicitors fee to do the admin.
I suspect it would be easier for the OP to inherit the money, and then give it to his son 'privately' as in outside of the probate process.

Either way, if you or the son need to transfer it from £ to €, there will be a transfer fee, or a 'free transfer' with an inflated exchange rate to cover the currency conversion.

I suppose my question is why does it need to be kept in a UK £ account rather than €?

You must have a lot of faith in the pound to want to leave the money in the UK. Have a look at the long term exchange rate trend, now doesn’t seem a bad time to take money out.

Only if you leave it as cash. If you invest it, in say equities, then the value of the £ doesn't really matter.

Would this inheritance affect the OPs tax status if it was kept in the UK?
(just wondering)

Thank so far. My son is with us in Austria. We wanted to keep the money in the UK in case he wants to study in the UK. Won't change the will so some of you are correct that it is a red herring.

The problem I see is that if I leave it in the UK there is tax involved and I may have to file returns in UK and Austria which I want to avoid as I am currently on the equivalent of PAYE.

In that case it seems the question can be simplified into just "whats the cheapest way to to transfer £xxxx into €.
Then ask the executors to transfer your inheritence to you via that method.

Then you can do what you please with it, invest it, gift it to your son, put it into some sort of trust fund in Austria etc.

But then, as you point out, if you need to convert it back to £ if he wants to study in the UK, you will pay again to transfer it back.

Wise.com as mentioned are usually good value, £20k transfered into € will currently cost you about £70. but then you'll have to pay a transfer fee again if you want to convert it back for education fees or whatever in £.
If its a really large amount of money then maybe there are more specialist brokers or financial products available, but that's not something I have experience of.

The problem I see is that if I leave it in the UK there is tax involved and I may have to file returns in UK and Austria which I want to avoid as I am currently on the equivalent of PAYE.

What UK taxes do you think you'll have to pay?
Any Inheritance Tax will be paid by the estate, and I don't think you pay CGT on inheritance, so that only really leaves any interest earned on the money in the bank.

I'm sure one of the big high street banks offer a reserve account for expats/non-residents. Pretty high minimum balance requirements.

They probably operate some sort of withholding tax on the interest (Not 100% sure if UK operates this, being a citizen it's never been a problem for me 🙂 ).

Only if you leave it as cash. If you invest it, in say equities, then the value of the £ doesn’t really matter.

There are very few investment possibilities open to EU residents. We have HSBC Global View and could only invest in fixed income products in the UK which are ulikely to keep pace with inflation. The return was dreadful compared with our investments with the French end of HSBC.

The investments were tax free in the UK and we declared the income on our French tax declaration. It benefitted from no deductions unlike the French income.

It soon became apparent that having everything in Euros was the best option. We've just left a few £s festering for holidays and HSBC ask us if we really want the account about every six months. Other banks have apparently forced closure of some EU residents accounts.

The OP is a UK National, so should be able to open an ISA etc in the UK or at least a trading account? Might have to pay tax on the gains, but that's better than no gains...

Equally N26 don't accept UK citizens as customers any more, another brexit bonus.

I was born in Birmingham and failed to open anything other than current and fixed income accounts. My nationality didn't matter, it was where I'm resident and pay my tax that counted. IIRC I needed £50 000 minimum investment.

So you have inherited the money and are planning to give it away to your son. In England and Wales this would be a potentially exempt transfer from your estate, so if you live 7 years it is outside of your estate for inheritance tax purposes and no tax is payable. If you die within the 7 years then the value will be aggregated back to your estate for the purposes of calculating IHT.

Some (not all) European countries have lifetime gift tax, so if Austria do you might find there is an immediate charge to tax when making the gift to your son. It is worth checking.

If you choose to keep the money in the UK then I would look at a Metro Bank trustee account which you can place the funds in directly and then use that account as a basis to make any investments for growth until your son needs the money. If you have a UK based trust then there are lots of investment opportunities, but you would need to talk to a specialist Financial Advisor about that.

You must have a lot of faith in the pound to want to leave the money in the UK. 

You must have a lot of faith in the euro to want to take it out!
You talk of him studying in the UK, so I assume this would be for university costs and suchlike. They will be in sterling, if you leave it in sterling you are removing all of the exchange rate risks (and potential exchange rate gains)

I'll look after it for you.

Remember though, the value may go down (alot) aswell as up (unlikely). I'll use it to to fund the transfer of my forgotten uncles millions from Africa, there are issue currently about getting the funds out of the country. It's all above board the guy I am working with is the most honourable of princes.

When we lived abroad and wanted to maintain a UK presence for bank accounts and investments we just used my parents UK address and forged/lied on the necessary documents. Life's too short to worry about stupid stuff like that.

30 secs googling suggests that Austria does indeed have a gift tax. If you wish to do it legally, changing the will (deed of variation) such that the son inherits directly might be the best route.

When we lived abroad and wanted to maintain a UK presence for bank accounts and investments we just used my parents UK address and forged/lied on the necessary documents. Life’s too short to worry about stupid stuff like that.

I'd probably go down this route if I had to do it again - when my mum died I opened a non-resident account with Lloyds, and while I have no complaints about the service now it's up and running it was a bit of a pain to set up, needing passport + you had to physically go into a branch etc., which wasn't ideal given I live in Spain. The account itself is based in the Isle of Man, presumably for tax reasons.