Galactica
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Capital gains tax on an inherited overseas property
Hello Team I was wondering if you could help me. My mother died back in February 2023 and following her death, i have inherited her flat in Greece. I managed to sell the flat in May 2023 and moved some of the money to the UK to repay part of my mortgage. I am really confused around the hmrc guidelines regarding inheritance tax and capital gains tax. I am a UK resident for tax purposes and I have been filling self assessment tax returns during the last 13 years in the uk. My mother (Greek nationality-non domiciled in the Uk) never owned anything in the UK. My questions are the following a) do I have to pay inheritance tax? b) do i have to pay capital gains tax- the value of the property between February and May stayed the same until the final sale c) I have not paid any tax in Greece (the law states that only the buyer pays tax)-do I have to pay tax here in the UK? d) if i have to pay uk tax, how do i declare this sale in the self assessment tax return form? form sa108 is for uk property sale and sa106 (foreign income is only if you have to declare rent and other source of income from overseas-but not for a property sale). or should I use the capitax tax gains questionnaire and uploaded it in my tax return? I have read and asked different people for advice and everyone suggested that i would only pay tax as capital gain if had put the money e.g. in a savings account. I transferred part of it which i directly put into my mortgage. Therefore, there was not enough time really for any interest in my current account. e) do i have to inform HMRC about this sale (for example by sending them a letter)? F) if i have to declare this sale, which financial year should i use? the year i inherited the flat (March 2023, January 2024 tax deadline) or the year of the sale (May 2023, tax deadline January 2025). thank you in advance