Dying in Poland - Inheritance tax ?

I know that in UK inheritance tax is a burden that is now affecting most of the 'middle classes', and not the very rich for which it was originally intended. Although in many cases the 'very rich' have lawyers/accountants who can advise them how to avoid this tax !

Here in UK i believe there is a tax threshold of approx £250 000, after which the government takes 40% of the remainder. This inheritance tax is not paid by surviving spouse, but by children or other beneficiaries.

On my last visit to Poland I was told that that the inheritance laws are more beneficial in Poland to beneficiaries than they are in UK; as long as the will is disclosed within 3-6 months then very close relatives of the deceased pay little or no inheritance tax.

Has anyone got any concrete information on this matter ?

Yes.
There is no inheritance tax in Poland if beneficiaries are close family members (spouse, children, parents, siblings) and inheritance is on territory of Poland or is executed in Poland

and beneficiaries are residents of EU.
This also applies to inheritance abroad if beneficiaries are Polish citizens or permanent residents.
If you are resident or citizen of another country , law of that country also applies to you.

Merged: Inheritance Tax in Poland

Czesc!

Any tax experts out there? I've just inherited some money from a deceased family member in the UK, and before I transfer the money to my Polish bank I want to make sure I'm not going to get screwed over by the Polish taxman. Any information about the possibility of this happening, and ways to avoid it would be greatly appreciated.

Thanks

Mikus

lets have a try

first off I understand that probate has been carried out in the UK, yes?
what nationality are you?
where do you reside for tax purposes?
what nationality was the deceased?
what was your relationship with the deceased? ie nephew, friend, son etc

armed with this knowledge I can give you my personal opinion which is not worth a hoot
but much cheaper than a lawyer

Hi!

Thanks for helping..

Probate has been carried out in the UK, although I don't know for sure what's been done regarding taxes. I can find out, but at this stage I assume everthing's been squared off as it should be.

I'm British, living full-time in Poland, but without Polish citizenship or anything more than being registered at my address, with Polish NIP etc.

The deceased was British, my father.

I am generally pretty clueless when it comes to matters like this, and it makes me livid that the Polish taxman - or any taxman for that matter - thinks they have the right to tax inheritance, but that's the way it is so I've got to make sure I'm covered!

personally a lot depends on the amount. if it is a good whack, it makes sense to have a chat with professionals. if it is a smaller sum, bite the bullet and pay the tax in the UK and (waits for howls of anguish from his fellow posters) do not declare it in Poland. No one is going to find out

Why don`t you go to the Tax Office and ask , they will inform you or you can write a letter to the Izba Skarbowa with formal question and you will get a binding interpretation .

But here is the Law about your case :


It says if you are not a Polish citizen but only a permanent resident so called Polish Tax resident you are a subject of Polish inheritance law and obliged to pay:

Pursuant to Article 2 of the Act of July 28, 1983. on inheritance and donation tax acquisition of ownership of goods located abroad or property rights carried out abroad (eg in Germany) is subject to tax if at the time of opening the inheritance (death of the testator), the buyer was a Polish citizen or had his permanent residence in the territory of the Republic of Poland (Polish tax resident).

However, Poland has reached agreements with some countries on the avoidance of double taxation in the area of ​​inheritance taxes, for example with Hungary, Austria. These agreements specifically regulate the exclusion of the double taxation, but they are rare.

a) There is pretty much no way to avoid paying death duty in the UK with regard to somebody who has already died. The state takes its cut.

b) From memory if there is no duty to be paid in the UK (i.e. estate under GBP 325,000) or tax has already been paid in the UK, there is no tax liability in Poland.

Mikus: sorry to hear about your father. I would suggest you send a PM or email to a member here called ukpolska: he has recently been through exactly the same situation as you and can give you up-to-date first-hand advice about taxes etc.

No, you are wrong !!!! Don`t give false information if you dodn`t know anything about the Polish Tax Law !!!!!

The mutual agreement between Poland and UK about the avoidance of double taxation does not pertain the inheritance tax .

Well....

It seems there are some conflicting opinions here, as I feared there might be :(

On the positive side:

- From memory if there is no duty to be paid in the UK (i.e. estate under GBP 325,000) or tax has already been paid in the UK, there is no tax liability in Poland.

and the negative

- It says if you are not a Polish citizen but only a permanent resident so called Polish Tax resident you are a subject of Polish inheritance law and obliged to pay .

- The mutual agreement between Poland and UK about the avoidance of double taxation does not pertain the inheritance tax.

Just to be clear:

- although I haven't explicitly asked the solicitor who's dealing with the estate, at this point I'm confident that all UK taxes/duties have been or will be paid, and that the amount I'm receiving is after tax.

- The amount is less than GBP 325,000, but it's a decent whack.
- The solicitor said "The only matter outstanding in the estate is the final tax return. The forms have been submitted to H M Revenue & Customs but have not yet been processed. I am suggesting that I make an interim payment."

As suggested I will talk to a professional about this, and also to ukpolska (thanks Polmed).

As a matter of interest, does anyone know anything about:

a) whether I'm supposed to declare this to the Polish taxman, or how else he might find out?
b) whether leaving the money in the UK, or not bringing it to Poland would exempt me from any possible taxes?
c) If, as a normal UK citizen residing in the UK I would obliged to declare the money and pay tax, or would this tax already have been paid before I got the money?

Thanks again!

You misunderstand: the tax is paid by the person who died. It doesn't matter who gets how much, only the size of the estate. If it is over GBP 325,000, there is a 40% tax on the amount over that figure.


And why would it, given that there is no inheritance tax in England, only estate tax? But of course you don't know the difference between the two. Stick to pretending to be a Polish lawyer, Monia.


Speak to ukpolska before you speak to a professional: there may well not be a need to pay for a professional.

a) If you bring it here, declare it.
b) Leave it in the UK and there is no tax liability in Poland (there is no tax liability if you bring it to Poland but you do need to declare it).

c) The tax is not owed by you and if there is any due, it will be taken before the money gets to you.

Dear OP I am a Polish lawyer , so don`t pay attention to what this Harry says , please .

It doesnt matter if you can be exempt from paying taxes in UK , if you are a subject of Polish legal system ( Polish Tax resident ) it means that you are fully a Polish Tax payer . Polish inheritance Law has got very different rules of the tax exemptions than those which are constituted under the British law . But there are some , eg you are the first group heir and under the Polish inheritance law you are exempt from paying taxes no matter how much you inherited ) the sum is not important . So you need only fo fill out a special form at the tax office and then you will get an official decision about the tax exemption . But if you don˛t submit that form you will be obliged to pay. I don`t know the exact date of your inheritance , because under the Polish legal system , the form SD-Z1 must be filled out within one month period after you inherited the inheritance rights ( here in Poland after the court decision became final or after you signed a notary act of inheritance ) I don`t know it under the British Law , so I can`t tell you if that date is exceeded.

But not much of one. And not an accountant either.

Estate tax has already been paid (or waived because the sum is below £325k). this means that it is his in full; it is his personal assets and no longer an inheritance.

Probate on the estate has already been completed, the money has already been inherited. Therefore he does not need to declare it as an inheritance because it no longer is one.

I don`t have to be accountant , The Tax law is a part of legal system so I am the one to interprete it , not an accountant . Accountants only follow the rules which are written in Accountancy Law, don`t you understand what it is written in previous posts especially about the obligation of paying taxes from money earned or inherited in another country .

To the OP - don`t transfer the money to Poland if you can`t fill out the form I was talking about , then you will avoid paying taxes here . This will happen not because you are exempt from paying them but because the Polish Tax office will not find out about the obligation , but if you transfer the money the whole procedure might be started .

A particularly weak piece of backpedalling. The money isn't inherited. It was previously inherited and the process of probate finished in another country. That's the difference which you doin't seem to understand, Monia. If someone transfers money from their own account in the UK to their own account in Poland, it is their money and providing the source is legal, no inheritance has to be declared. Moving your personal savings from one part of the EU to another does not incur tax.

Get many repeat customers as a lawyer, do you, Monia?

It seems that you dont understand the whole idea of law . It is not the way you want to be , but it is always the way the state wants , and it is constructed the way in order to take as much money as the state can . All money in circulation is taxed , don`t you know . It happens in eg turnover tax which is callled VAT . The subject of taxation is the same only the tax payer changes . It is very similar with inheritance tax . The subject of this tax is always the same omount of money ( inheritance ) , estate .....- doesn`t matter how you call it ( in Polish we call it inheritance ) only the taxpayer changes . Polish law is constructed in the same way as other countries law . Check the similarities . There is a lot of them . The Dutch law regarding inheritance taxes is very similar .

Can`t you read the Polish law called - inheritance tax law (translated via Google):


it says clearly it must be paid in Poland if you are a Polish Tax resident , which means if you pay taxes in Poland ,

Poland and Uk signed mutual agreement about avoidance of double taxation only in regards of taxes like personal income tax , corporation tax and capital gains tax .

Give me a break I will not answer to your repetitive false statements .

Don`t worry - my clients return to me with pleasure .

Again you are wrong. This isn't income - it was income and has been taxed as such already in a jurisdiction where Polish law does not apply. After probate has been completed it is, I repeat, personal assets. Not income. And by the way, there is no VAT on either personal assets or inheritance.


No need, I can read Polish. And evidently better than you in this case. It is only an inheritance if it is declared as one - and since under English law it is no longer an inheritance after the disbursement is made, Polish law does not apply. There is no reason that the Urząd Skarbowy should know the original source of UK assets transferred from someone's own bank account. Do you think that whenever someone transfers money to buy a house or flat they have to prove the source of that money?


But what about the ones for your legal practice?

" doesn`t matter how you call it ( in Polish we call it inheritance ) only the taxpayer changes ."
Actually it very much does matter. In England there is estate tax, meaning the estate of the dead person pays out and the heirs get the rest. In Poland each separate heir must pay whatever tax its owed. One version produces minimal paperwork, the other keeps lots of Polish bureaucrats in jobs.

" but it says clearly it must be paid in Poland if you are a Polish Tax resident , which means if you pay taxes in Poland ,"

Even interns can tell us that the tax office say otherwise. But then interns are actually studying for a degree in law and will one day actually be admitted to the bar (they hope).

" Don`t worry - my clients return to me with pleasure ."

Polish tax system does not make inquiries where the taxpayer intends to spend the money , what matters is the original source of it .


Very funny indeed !

Where have you read that in ? Reader`s Digest ?

You know it takes 5 years of uni and 4 yesrs of intern training to become an advocate in Poland , which I completed so maybe give up your insane claims and stop pretending to know something about Polish law , you are plain ignorant in that area . You possess a hillybilly wisdom about Poland so your comments sound very funny to me .

Unfortunately for you (and your customers) as with so many things in Poland, what is on paper isn't always lived up to in reality.

I suspect it hasn't occurred to you that some of the posters here (including me) have actually been in this situation. And contacted a real tax specialist. I had the money transferred as my private assets (which by then they were) and that was that.

It's always worth asking (as the original poster has done) people who have been in this situation and sought proper and reliable advice instead of an internet 'lawyer' (who sometimes claims to be other things) and has plenty of time (never a good thing in the legal profession) to sit on the internet abusing people on fora in a frankly disturbing way:

With me the process was: speak to person who had recently been through the same thing, write to tax office, get a letter which they requested from the UK tax office which had dealt with the estate, have it translated by a sworn translator, send both letter and translation to tax office, have money wired to Poland. But, as that was 12 years ago, the OP would be better off speaking to somebody who has more recently been through the same thing, preferably with the same tax office.

You have to wonder what kind of lawyer would commit criminal libel here. Not really very smart, is it?

Look at my answer , I said that before you , Mr . Just look at my posts

This is what I said :


If you have nothing to say , don`t say it , you two are constantly abusing me , but I don`t pay too much attention to IT , because everybody here knows who you are . You are just full of hate , nothing else . It happens that I have a lot of work in my office , that`s why I frequently sit at the computer writting documents to the court . So, from time to time I have an opportunity to write something on PF . As you can check I started writting my posts last year contrary to both of you who have been sitting here for ages .

Wrong: the form you mention is utterly irrelevant. And wrong because the tax owing on the money will have already been paid before the OP gets the money, so there is no tax for him to be exempt from paying.


Sorry Monia but it was you who started ordering people about and giving utterly irrelevant advice, claim that nobody here other than you knows anything about tax law.

I did, you didn't and your posts are unhelpful.


If anything, it is the other way round.


You can't stop yourself, can you Monia - turning a thread asking for advice into well - a źenada.

The OP would do well to look at my advice, look at Harry's advice and perhaps speak to one of the companies who deal with expat finance - Saltire is fairly well known in Warsaw though they are Independent Financial Advisers and I can't in all honesty recommend them. If the OP PMs me, I'll give him the website address of an accountant who is British/Polish, highly competent, not interested in selling you things and based in Warsaw.

In this case my post was based on law but yours was not helpful from just one important reason , it was an answer without any legal contents informing OP it was legal to make a transfer of inherited money from UK to Poland because such money is no longer inheritance , which is totally false . The financial advisors could tell you something like that but of course you didn`t understand them in full . Sending such money the way you did was only a circumventiom of law . They certainly didn`t give such advice on paper because it is illegal to give legal advice which is contrary to law .

I am leaving all your other comments without any answer because I don`t argue with fools .

I have used them and they are a complete disaster zone
badly managed and complete and total pathological liars

there is a nice Scottish guy who is an absentee landlord type of manager and his underlings are the scum of the earth who would eat their own young

although useful for free advice

That mirrors my experiences a few years ago.

What about Deloitte? Company I work for uses them to manage expat's taxes and I haven't heard anyone complain so far?

I cannot comment. I never worked with them but I knew some of the people who worked there and they were lovely. I have not heard any complaints except about them being expensive

My tax office in Warsaw disagree with you. And when given the choice of believing them or believing somebody who most certainly is not a tax adviser in Poland, I'll believe them every time.


Publicly accusing another person of being a criminal really is not too clever. As even an intern at a law firm knows.


He is a very nice bloke. But I've not used their professional services and so can't comment on those.


Somewhat expensive.