Last updated: 14 October 2026
Is a foreign inheritance taxable in the UK?
Not as income. The UK has no tax on receiving an inheritance. Inheritance tax (IHT) is charged on the estate of the person who died, not on the beneficiary. If the deceased lived abroad and wasn’t a long-term UK resident, UK IHT usually applies only to their UK assets. However, once you hold the inherited money or assets, the income and gains they produce are taxable in the UK if you are UK resident.
What you may need to think about
| Issue | UK tax position |
| Receiving cash or assets from an overseas estate | No UK income tax or CGT on receipt |
| UK IHT on the estate | Only if the deceased was a long-term UK resident, or on UK assets |
| Foreign inheritance tax | May be due in the other country, paid by the estate or heir under local law |
| Interest, rent or dividends from the inherited assets | Taxable for UK residents |
| Selling inherited assets | CGT on any gain above the value at the date of death |
Bringing the money to the UK
Transferring an inheritance to a UK bank account isn’t taxable in itself. Since April 2025, the remittance basis has been replaced by the Foreign Income and Gains regime for new arrivals, so most UK residents are taxed on worldwide income as it arises. Your bank may ask for evidence of the source of funds, such as a will, a probate grant and estate accounts.
Selling an inherited overseas property
Your base cost for CGT is the market value at the date of death, converted to sterling at the exchange rate on that date. When you sell, you report the gain in your UK tax return, with credit for any foreign tax on the same gain under double tax rules.
Example
Fatima inherits a flat in Spain worth £150,000 at her father’s death. Three years later she sells it for £180,000. Her gain is £30,000, less costs and the £3,000 annual exempt amount. She pays CGT in the UK at 18% or 24%, with credit for any Spanish tax on the gain.
Rental income from inherited property
If you let the property, report the rental profit on your UK tax return (foreign pages), with credit for foreign tax paid.
Reporting
- No reporting is needed when you receive the inheritance
- Report income and gains from it on Self Assessment
- If you have offshore income or gains that weren’t reported in past years, use HMRC’s Worldwide Disclosure Facility
Frequently asked questions
Do I need to declare a foreign inheritance to HMRC?
Not the inheritance itself, but you do need to declare any income or gains it produces.
Will I pay UK IHT on money I inherited from my mother abroad?
Not usually, unless she was a long-term UK resident or owned UK assets.
What exchange rate do I use?
The rate on the date of death for the base cost, and the rate on the date of sale for the proceeds.
Do exchange rate movements count?
Yes. Gains are worked out in sterling, so a change in the exchange rate can increase or reduce your gain.
Related: overseas assets and UK IHT.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with foreign inheritances. See our inheritance and international tax advice service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
