Foreign national, filing US 1040, inheriting foreign assets

Hi all.

This one is, admittedly, way out of my depth. This is a (non-hypothetical) question posed by a friend that I'm trying to help out. If the answer is anything short of "there's nothing to worry about", she's going to a qualified tax pro.

To the point: I have a friend that is a British citizen, married to a natural-born US citizen, both working and living in America, and filing an annual 1040 as MFJ. The Brit is soon to inherit about $50,000 (USD) from an Aunt that died in England. The Aunt was a British citizen and resident, and the estate is being probated (or whatever they call it) in England. The inheritance will be the product of various stocks, bonds, CDs, and cash that was liquidated by the estate shortly after the Aunt died.

Any idea if my British friend will incur any tax consequences as a result of the inheritance? My knowledge of this area of taxation is nil. If it matters, my friend tells me that she does not file a British tax return. Their is such a thing, but the average British citizen isn't required to file one, nor is she. She doesn't have British income, and has properly notified HMRC that she is no longer domiciled in England.

thanks in advance for any assistance you can provide.

There is normally no tax consequences for the recipient of an inheritance or gift in the USA. There may be tax implications in the UK, but I think any taxes there are paid by the estate.

For gifts of $100,000 or more, IRS form 3520 must be filed. That does not appear to apply in your case.

The thing that might be considered an exception applies to stocks, bonds etc. That is that if the stock, bond etc. earned income after the order of distribution (e.g. when the beneficiary becomes the legal owner), the beneficiary will be taxed on income that is attributed to any time after that.

There may be nuances that I am not aware of with respect to property inherited from the UK, but I am not aware of any.