Do you have to pay tax on inheritance from overseas? Good question — and one that pops up more often than you’d think, especially for Kiwis receiving money from family abroad. Whether it’s a house in the UK, cash from overseas, or a foreign inheritance, it’s easy to get tangled in rules that don’t seem to apply… until they suddenly do.
Let’s get this straight from the start: New Zealand doesn’t have inheritance tax. But that doesn’t always mean you’re in the clear. You might still have to declare overseas inheritance, deal with gift duty, or figure out whether foreign tax has already been deducted on the other side. And yep — the IRD might still want a word if that inheritance earns you money later.
This article is here to help you make sense of it all. We’ll walk through the different situations where tax could apply, what to watch out for depending on the country, and how to stay on the right side of the rules — without overpaying or missing a step. Let’s clear it all up.
Understanding overseas inheritance and tax implications
If you’re wondering whether you have to pay tax on inheritance from overseas, the first step is understanding what that actually means. Not all countries treat inheritance the same way, and not all types of assets are considered equal.
What qualifies as inheritance from overseas?
Overseas inheritance refers to money, property, or assets you receive from someone who lived or held assets in another country. This can include direct bank transfers, inherited real estate, or even shares in foreign companies.
Is inheritance taxable income in New Zealand or abroad?
In New Zealand, inheritance is not considered taxable income, meaning you don’t pay income tax when you receive it. But this doesn’t mean you’re always off the hook. If the asset later generates income (like rent or interest), that income is taxable in NZ.
In contrast, other countries like the United States or United Kingdom may tax the estate itself, or even you as the beneficiary.
Key points:
- NZ doesn’t charge tax on the inheritance itself
- Some countries charge estate or inheritance tax before it reaches you
Do you have to declare foreign inheritance in NZ?
Even though there’s no inheritance tax in New Zealand, the IRD still wants transparency. Depending on the situation, you might be required to declare overseas inheritance — especially if it later earns you money or involves a large transfer.
What the IRD says about declaring overseas money
The IRD expects NZ residents to disclose all overseas income, even if it comes from an inheritance. If the inheritance produces income (e.g. a rental property overseas), that income must be declared in your NZ tax return.
Related article: You can learn more in our article on moving overseas tax advice
Tax obligations for NZ residents receiving foreign inheritance
If you inherit foreign property or investments, you may become liable for tax on any income or gains they generate. The inheritance itself isn’t taxed, but what comes after might be.
Key points:
- Declare if the inherited asset generates income
- Declare if you sell the asset and make a capital gain
External source:
Australian Taxation Office – foreign inheritance rules
Gift vs inheritance: What’s the difference?
Not everything that looks like an inheritance is treated as one. Sometimes, family members overseas gift you money before they pass away — and this could be treated differently by tax authorities.
When a gift becomes a taxable event
If you’re receiving a large monetary gift from overseas, it may be subject to anti-money laundering checks or financial scrutiny. While New Zealand doesn’t tax gifts, certain conditions — like regular, large gifts — can raise red flags.
Does New Zealand have gift duty?
No, gift duty in NZ was abolished in 2011. However, receiving large gifts could still have indirect implications (e.g. if they generate income or are related to trust structures).
Key points:
- Gifts aren’t taxed but must be traceable
- Some gifts may trigger tax later if they generate income
Table comparing tax treatment of gifts vs inheritances in NZ
| Type | Taxed in NZ? | Declaration Needed | Tax on Future Income |
|---|---|---|---|
| Inheritance | No | Sometimes | Yes (if income earned) |
| Gift | No | Rarely | Yes (if income earned) |
What about tax in the country where the inheritance originates?
Here’s where things can get messy. If you’re receiving an inheritance from a country with estate or inheritance tax, the tax might be taken before you even receive the money. You’ll want to make sure you understand if tax has already been paid overseas.
Countries that apply inheritance tax (UK, USA, France)
- UK: Inheritance tax is paid by the estate, usually before distribution.
- USA: The federal estate tax applies only to large estates (over USD 13.6 million in 2025).
- France: Inheritance tax is based on your relationship to the deceased and the value received.
Can you claim a tax credit or exemption in NZ?
NZ generally doesn’t provide foreign tax credits for inheritance-related taxes, but you may be able to offset foreign income tax if the inherited asset generates revenue. This requires specific documentation and timing.
For travel-related inheritance scenarios, read our overseas travel expenses guide
Summary table: Overseas inheritance tax by country
Let’s compare how some major countries handle inheritance and what that means for a NZ tax resident.
IMAGE: Table visual with global icons for each country
| Country | Inheritance Tax? | Paid by Whom | Need to Declare in NZ? |
|---|---|---|---|
| New Zealand | No | — | Sometimes |
| UK | Yes (40% on estate) | The estate | Possibly |
| USA | Yes (estate tax) | The estate | If asset generates income |
| Australia | No | — | Depends on asset |
| France | Yes (varies by relationship) | Beneficiary | Yes if income later |
Bonus for do you have to pay tax on inheritance from overseas
Here are a few practical tips to stay compliant and protect your overseas inheritance from avoidable tax issues.
Checklist:
- Check if the country of origin charges estate or inheritance tax
- Verify if income from the inheritance needs to be declared in NZ
- Keep all documentation (wills, bank statements, tax receipts)
- Speak with a tax adviser if the value is significant
- Consider financial planning for future income
Need help? Contact us for advice via our BH Accounting contact page
Conclusion
So, do you have to pay tax on inheritance from overseas? In New Zealand, the inheritance itself isn’t taxed — but depending on where it comes from and how it’s structured, there may still be declaration requirements, foreign tax considerations, or income tax implications down the line. The IRD may not ask for a cut upfront, but if your inheritance earns interest, rent, or dividends, it can become taxable income in NZ.
The best move? Keep things clean and transparent. Ask questions early, talk to a tax adviser if needed, and stay on top of any income your overseas inheritance might generate. If you’re unsure where to start, we’re here to help — reach out through our contact form for a tailored referral.
FAQ about do you have to pay tax on inheritance from overseas
Is overseas inheritance taxable in New Zealand?
No, the inheritance itself isn’t taxed. But if it generates income later (like rent or interest), that income is taxable.
Do I need to declare an overseas inheritance to IRD?
You don’t need to declare the inheritance itself, but you must report any income it produces or capital gains if you sell it.
What if the inheritance has already been taxed overseas?
You usually won’t pay tax again in NZ, but you should keep proof of any tax paid overseas and disclose it if the asset earns income.
Is gift money from overseas treated the same as inheritance?
Not exactly. Gifts aren’t taxed in NZ, but they may still need to be documented if they generate income or come from a trust.
Can I claim a tax credit for foreign inheritance tax?
No, inheritance tax paid overseas isn’t claimable in NZ. Only foreign income tax might qualify for credits if income is later earned.