Inheritance and Living Abroad

Hello,

I’m hoping someone can offer some advice.

My mother passed away in November in the states and I was fortunate enough to be able to return home to be with her when she passed.

It was awful and I spent another six weeks at her home clearing through her things to vacate her apartment and organize her affairs.

I’ve pretty much sorted everything but now that I am back in the UK I am in contact with her former employer regarding her pension which I am a partial beneficiary of. I have been told that this has to be paid into a us bank account but I don’t currently have one and I have no knowledge of how to go about setting this up or even how to process any of this.

Can anyone offer any advice on what the tax situation will be like and what I need to do regarding a bank account? I’m a little overwhelmed by all of this and she was the person I used to ask these sorts of questions. Any advice would be greatly appreciated.

Very sorry to hear about your loss.

I can only offer advice on the bank account situation, really. The exact bank account that expats always wanted: both gbp and usd accounts at the same bank that you can easily move money between?? Wise (formerly Transferwise) do just such accounts.

The tax situation may be really straightforward, or not. It depends on how much money is invoked and how the money has been held. Seems like a good idea to hire: employ someone who knows about US tax (as the US will get the first bite of the apple, with tax stuff). Once that’s clear, you can worry about the uk tax stuff (lots of info on the gov website if you want to take a quick look). It may also be that some of this is covered in the dual taxation treat for how this should be treated.


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i'm very sorry to hear about your mother, my condolences...

So very difficult when you're thousands of miles away, totally overwhelming.

The (i'm guessing) 401(k) custodian can send you a check in the U.K. It's totally unreasonable and virtually not possible to expect a non U.S resident beneficiary to open a U.S. bank account. You may have been able to convert your mother's account to yours, perhaps you are ITF/POD on the account. This would have been the simple option for other financial items in the estate too. Once the estate is out of probable and closed, so can the bank account and a check mailed to you. You can of course open a Wise account as suggested and ACH to yourself. Also https://www.sdfcu.org/ will open an account for you, should you prefer a long term, traditional approach.

The 401(k) will be a part of an inheritance.. Just call HMRC and ask how it's handled, they've heard it all before...

I hope this helps and best wishes....

Sorry for your loss.

I think a Wise account is well worth looking into to have the money paid.  I'm pretty sure that you will not have any UK tax obligations.  Any estate/inheritance and income taxes will all be US tax issues.  I don't think the resulting funds that will be transferred to you in the UK will be subject to UK taxes.  My wife and I have been through this several times the other way round, with parents and relatives dying in the UK and the resulting funds transferred to the US.

All the best going forward.  I would concentrate on getting her estate settled before worrying about the UK side of things.  HMRC are pretty responsive I think so you could always fire off a query to them.

So very difficult when you're thousands of miles away, totally overwhelming.

The (i'm guessing) 401(k) custodian can send you a check in the U.K. It's totally unreasonable and virtually not possible to expect a non U.S resident beneficiary to open a U.S. bank account.

Also https://www.sdfcu.org/ will open an account for you, should you prefer a long term, traditional approach.

The 401(k) will be a part of an inheritance.. Just call HMRC and ask how it's handled, they've heard it all before...

Thank you for this, they were incredibly unhelpful, I ended up having to put in a complaint about it as the person I originally was dealing with was incredibly rude and unhelpful. The person I’m dealing with now is much more professional but has come back to me saying that funds cannot be deposited into a Foreign Bank Account only a US Bank account. I’m going to take your suggestion and look into this, is this credit union good for international citizens?

I really appreciate all advice, thank you everyone

Thank you for this, they were incredibly unhelpful, I ended up having to put in a complaint about it as the person I originally was dealing with was incredibly rude and unhelpful. The person I’m dealing with now is much more professional but has come back to me saying that funds cannot be deposited into a Foreign Bank Account only a US Bank account. I’m going to take your suggestion and look into this, is this credit union good for international citizens?

I really appreciate all advice, thank you everyone

They openly promote their accounts for U.S. Citizens with an overseas address. I'm not aware of another conventional account that does this. I'd go for a Wise account myself, but two things deter me: Not insured & offer no check book. My 401(k) provider insisted on a voided check OR I get mailed a check, which does make things more complex, not to mention exchange rate/fees. (I use Wise to transfer - fantastic system)

You will need to join:
https://www.americansabroad.org/sdfcu-account/ ($70 per year membership)
OR
https://www.americanconsumercouncil.org/ ($15 life membership)

I don't have an account with them, but would open one up if my U.S. account does get closed down as many are for U.S. Citizens living overseas.
Let us know how it goes...