Property in England - IRS Tax questions
My Mother wants to add me as co owner of her house in England, so that when she passes away the house will automatically become mine. I would like to know how this will affect my taxes and tax reporting requirements, here in California. Any personal experiences on how you handled this situation or referral to experts in this area would be greatly appreciated.
May 22, 2017
Parent Replies
Without getting too specific as this public forum and the basic information you provided is not conductive to being able to provide targeted tax advice, I would urge you speak to a tax professional on this topic. This could potentially give rise to several tax issues both here in the U.S. and in the U.K. There are certain benefits to inheriting real property as opposed to receiving it as a gift, and then your mom has gift and estate tax to consider (likely only in U.K., but potentially in U.S. too). A tax professional would be able to walk you through all the pros and cons of doing this and consulting an estate and trust attorney in U.K. might provide your mom with other alternatives to ensure you get the house if a current gift turns out to not be a smart move.
Unless there is income from the property, there are no tax consequences nor tax reporting requirements. FINCEN requires reporting of foreign bank accounts. I am an attorney and master tax advisor.