Anne asks:

My father wants to give me and my 2 siblings our inheritance early, he's only 69 and in good health so the amount shouldn't be hit by inheritance tax (at least that's my understanding). However, although he's a British citizen and has a small British pension he lives in Australia (has done for 25 yrs) and our inheritance will be transferred from Australia to here, where we all live. It's likely to be around $60,000 (AU) each, will this be taxed coming into the country? And if so is their any way it can be paid in such a way that the tax is minimised?

Your father’s inheritance tax position is interesting in that I wonder if he is still domiciled in the UK? His ‘domicile’ – his real, ultimate home – is very relevant for IHT.

Someone with a UK domicile is liable to IHT on all their worldwide assets; a non-UK domicile means inheritance tax is payable only on UK assets. If he has severed his own links with the UK and regards Australia as his home, that would mean he is probably Australian-domiciled.

Either way, if he does give you money now it won’t be caught for inheritance tax if he survives seven years – though three gifts of Aus$60,000 each will still be well under the inheritance tax nil rate band and so there won’t be any IHT in any event (assuming he hasn’t made lots of other gifts). If he does give you some money, there is no tax or duty on bringing it into the UK, so no need to worry on that account.

You do need to confirm the Australian position over any taxes which I can’t comment on – but no doubt your father will be able to do that.

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