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Posted Fri, 08 Dec 2023 19:48:14 GMT by
I'm a UK resident (canadian citizen). Mom passed in July. She left some stocks and a house to my brother & I 50-50. After the estate pays capital gains tax on stocks and probate fees, where is the withholding tax applied and is it 25% or 15% or 0%? Lets say my share is 100,000 CDN in stock after fees/taxes, transfered to a cdn brokerage. Does the executor withhold 25%, 15% or 0%? if its 25%, we may need to wait 1.5 years to reclaim the 10%? who gets the interest/capital gains after DOD? HMRC or Canada? Same goes with the house. 25%, 15% or 0%? Regardless of the answer, if i was to die during this lengthy process, HMRC would want 40% more, but off which number? After fees, transfer of assets, wife/children left with almost nothing.
Posted Fri, 15 Dec 2023 08:32:26 GMT by HMRC Admin 25 Response
Hi Stephen Clements,
As this is foreign assets you are referring to, you would need to check with the Canadian autorities for the rates of tax that should be applied.
Capital Gains Tax will only arise when assets have been sold and the tax would be paid in Canada as part of the estate and you would then be a beneficiary of the estate income.
However, if it is you that is selling the assets, you need to report the gain and can then claim Foreign Tax Credit Relief for tax paid in Canada to reduce your UK tax bill.
Thank you. 

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