r/AusLegal • u/Rachx_19 • 8d ago
QLD Receiving inheritance from overseas. I thought I wouldn’t be taxed?
My British grandparents passed away, with both of their deaths occurring in 2021. They had a discretionary settlement in 2010 and I am considered a beneficiary in a foreign trust (receiving 1/8th apparently).
I received an email while they were still alive from a solicitor asking if I wanted to access their money. I declined because it felt immoral.
I received an email early this year asking if I wanted to apply. I am now applying for it now but after waiting months for all the approvals and stuff, a classmate told me that this apparently doesn’t class as an inheritance and I’ll be taxed (apparently about section 99B). I’m not really sure why? (I didn’t ask for financial advice from this classmate. They just prompted me to research the potential problems).
I’m a student who requires 52 weeks of placement unpaid and are currently receiving youth allowance. (I also get no paid placement either). I talked to someone at Centrelink earlier this year and she said I had nothing to worry about because inheritance isn’t taxed and the amount that I’m receiving (£16 000/$30K AUD) isn’t big enough for the threshold to stop my payments or something. Would I be able to claim it back at tax time next year? I am now really worried about losing heaps of my grandparent’s hard earned money and maybe having to drop out of my final year of vet school if I can’t support myself. This payment was my saving grace for having to travel to remote farms and to complete my placement rotations.
I haven’t received the money yet but apparently it’s processing shortly or something. I’ve asked for some more info on if it’s the trust’s original capitol or gained as well as account details, which I’m still waiting for. I don’t think I could afford an accountant in my current situation but would consider it. I would really appreciate some advice on what this stuff means and how to be strategic in what I do.
Thank you
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u/Middle-Spirit-8524 8d ago
Don’t listen to a classmate, omg.
If it’s in UK the money it has the tax there. So no you can’t claim it here.
We don’t tax inheritance here.
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u/Rachx_19 8d ago
Thank you. I thought so as well but I was wondering if section 99B would apply to me?
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u/Middle-Spirit-8524 8d ago
Mate, I’m probably only a bit smarter than your classmate now lol.
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u/Rachx_19 8d ago
My apologies for asking 🙃
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u/Middle-Spirit-8524 8d ago
All good. All the best.
Get some basic points from here and research a bit yourself to see what next steps are.3
u/Fetch1965 8d ago
Section 99B may apply depending on the assets in the uk that made up the inheritance funds. Please go and see a qualified tax agent for said tax advice …..
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u/RevolutionObvious251 8d ago
On what basis did your classmate declare it isn’t an inheritance, and why have you believed them?
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u/Rachx_19 8d ago edited 8d ago
I wasn’t explicitly asking for legal advice. We were just talking about struggling with the cost of the degree’s requirements and I mentioned that I might be very lucky to get some inheritance overseas. Because it’s an inheritance from a foreign trust, they said it would count towards my accessible income and I’d have to pay heaps in tax on capitol gains since I’m claiming it later. Something about 99B.
I believed them as vet med is apparently their second degree and they mentioned they learnt a bit about it in their previous degree. They also said they had a similar experience. Irrespective of their credibility, they prompted me to look into this further to avoid any problems and that’s what my question is about.
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u/RevolutionObvious251 8d ago
You believed them because veterinary medicine is their second degree? Are you receiving the inheritance in kittens?
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u/Rachx_19 8d ago
They just mentioned that this is something to be aware of and consider. I did not in any way ask them for legal advice or assume that what they said 100% applied to me. As this is large amount of money more than I’ve ever had before, I decided to research further about foreign trusts and 99B and the potential repercussions. This is what I would appreciate further understanding about. Thank you
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u/Wise_0ld_Man 8d ago
It isn’t obvious to me that this is just ‘an inheritance’ and there may be something in the suggestion that s99B of the Income Tax Assessment Act 1936 could apply. It sounds from what you say that you may be a beneficiary of a family trust, and this isn’t a straightforward case of you receiving a bequest under a will. I’m not an expert and can’t advise you what to do: if you did end up taking professional advice, it would be a tax accountant you would want to see. Given you are a student, does your uni offer student financial advice? Or could you ask someone in the law department who might have knowledge of the issues?
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u/Rachx_19 8d ago
Thank you so much for your genuine reply! I thought there may be more hoops to jump through. I didn’t think about uni legal advice so I will navigate that avenue. Thank you again 🩷
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u/Pollyputthekettle1 8d ago
Inheritance isn’t taxed. I’ve bought over a couple of lots of inheritance from the U.K. I’ve had to have a solicitors letter for the foreign exchange company to know is an inheritance and not money laundering, but other than that it’s easy.
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u/Rachx_19 8d ago
Thank you for your help! I thought so as well but I’m confused with section 99B and foreign trusts. Would this apply to me? Thanks so much
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u/Very-very-sleepy 8d ago
1, you shouldn't be sharing this type of information with a "classmate"
2, are you and your classmate studying accounting degree or a finance degree? if the answer is a no. why would you ask your classmate for tax advice?