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Posted Thu, 14 Nov 2024 16:38:58 GMT by Weary Executor
I'm an executor for a deceased person's estate in the US. We have already paid estate tax in the US, and I understand each inheritance will not be taxed again when distributed to beneficiaries in the UK. However shares have been sold in the US and the estate has earned interest and dividends during the period of administration (after the owner's death but before distribution). The IRS have told us we must pay income tax and capital gains tax in the US. How is the income of the estate during administration treated for tax purposes in the UK? Is it simply treated as part of the inheritance, or is growth post-death treated as income by HMRC? And if so will it be taxed again given that tax has been paid in the US? I fully understand that growth of the inheritance AFTER distribution is taxable income, this question is about growth of the estate prior to distribution to heirs.
Posted Mon, 18 Nov 2024 11:40:30 GMT by HMRC Admin 8 Response
Hi,
It is not taxable in the UK.  
This is an estate the US, which is why inherticance tax and tax on interest / dividends generated by the estate are paid by the estate.  
The distributions to the UK beneficiaries have already been taxed and are not taxable again.  
If, after the amount inherited by the beneficiary generates interest of dividends, then that interest or dividends is taxable and should be declared by the beneficiary.
Thank you.
Posted Mon, 18 Nov 2024 12:08:34 GMT by Weary Executor
Thanks for clarifying.

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