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The short answer
If a parent who lived in Nigeria dies and leaves you money or property, you normally pay no UK inheritance tax on what you inherit: UK inheritance tax is paid out of the estate, and for someone based abroad it applies only to their UK assets. Tax can reach you later, though: UK income tax on rent or interest the inheritance earns after it is yours, and UK capital gains tax if you sell, measured from the value at the date of death.
When a father or mother dies at home, the questions in a UK household come quickly: do I owe HMRC something on the house in Surulere? Do I have to declare the money my brothers are sending me from the sale? The answers depend on three separate taxes and on where your parent lived. Separating them makes the picture much calmer.
Inheritance tax: paid by the estate, not by you
GOV.UK's main inheritance tax page says the tax is paid from the estate by the person dealing with it, and that beneficiaries do not normally pay tax on things they inherit. It adds that they may have to pay tax on income from what they inherit, such as rent.
Whether UK inheritance tax applies at all depends on the person who died. GOV.UK's page on deaths of people living abroad says someone who lived in the UK for less than 10 of the last 20 years is treated as based abroad, and only their UK assets are taxed. A parent who spent their life in Nigeria will usually fall into that group.
| What the parent left | UK inheritance tax (parent based abroad) |
|---|---|
| Land and houses in Nigeria | Not charged |
| Naira and dollar accounts in Nigerian banks | Not charged |
| Shares in Nigerian companies | Not charged |
| A UK bank account or UK property | Can be charged; the executor deals with it |
| Foreign-currency accounts with a UK bank | GOV.UK lists these among excluded assets for someone based abroad |
If your parent did live in Britain for a long spell, the long-term residence rules may bring their Nigerian assets into scope; see UK inheritance tax after 10 of 20 years.
Receiving the money in the UK
An inheritance is not income, so the transfer itself does not go on your tax return. What your UK bank will want is proof of where the money came from. United Trust Bank's source-of-funds guidance, for example, lists an executor's letter as the evidence for an inheritance and asks for documents for each source. Keep the grant of probate or letters of administration from the Nigerian court, the executor's or administrator's letter, the sale agreement if property was sold, and the statements showing the money leaving the estate. For the Nigerian court process, read letters of administration for a parent's property, and for moving sale proceeds see selling Nigerian property and moving the money.
Income tax on what the inheritance earns
Once the asset is yours, its income is yours. GOV.UK says UK residents normally pay UK tax on foreign income, including overseas rent and foreign interest and dividends, usually through Self Assessment. Rent from an inherited flat in Lagos goes on the SA106 foreign pages, converted to pounds at the exchange rate when the income arose, as HMRC's SA106 notes say. Nigerian tax taken from the rent can be credited against the UK tax on the same income, limited to the lower of the two amounts (HMRC helpsheet HS263). See UK tax on Lagos rental income.
Recent arrivals may be able to use the four-year foreign income and gains regime instead; LITRG explains who qualifies.
Capital gains tax if you sell later
Your starting value for UK capital gains tax is not what your parent paid. GOV.UK's market value page says that for inherited assets where the inheritance tax value is not known, you use the market value at the date of death. For a Nigerian house with no UK inheritance tax value, that means a valuation at the date of death, converted to pounds at that date's rate. HMRC's manual CG78310 confirms that cost and proceeds are each converted to sterling at their own dates.
Worked example (illustrative)
Example: a flat in Ikeja is valued at ₦80,000,000 at the date of death, when the example rate is £1 = ₦2,000, so the base value is £40,000. Three years later you sell it for ₦110,000,000 at an example rate of £1 = ₦2,200, which is £50,000. The UK gain is £50,000 − £40,000 = £10,000 before costs and the £3,000 annual exempt amount. If the naira had fallen further, to £1 = ₦2,800, the same sale would be worth £39,286, a sterling loss even though the naira price rose. The exchange rate does as much work as the property market.
Steps for a UK beneficiary
- Confirm where your parent lived and whether they had any UK assets.
- Get a dated valuation of any Nigerian property at the date of death and note the exchange rate used.
- Keep the court grant, executor's letter and transfer statements for your bank.
- From the date the asset is yours, record its income and any foreign tax deducted.
- Declare that income on Self Assessment in the tax year it arises.
Where Pryme fits
A Pryme Personal Account holds naira and pounds side by side (multicurrency), so rent from an inherited property can be received in naira and converted only when you choose. Verifiable statements from VerifyDoc.ai can support the source-of-funds questions your bank asks.
Questions people ask
Do I pay UK inheritance tax on my father's house in Nigeria?
Normally no. Inheritance tax is paid by the estate, and if your father was based abroad only his UK assets are taxed.
Do I declare inherited money from Nigeria on my UK tax return?
The inheritance itself is not income. You declare the income it earns afterwards, such as rent or interest, and any gain when you sell.
What value do I use for CGT on inherited Nigerian property?
Where there is no UK inheritance tax value, GOV.UK says to use the market value at the date of death, converted to pounds at that date.
My bank asked where the inheritance came from. What do I show?
Typically the court grant, an executor's or administrator's letter, any sale agreement and statements showing the money leaving the estate.
Sources
- GOV.UK: Inheritance Tax (updated 30 Sep 2026) · accessed Oct 2026
- GOV.UK: Inheritance Tax when someone living outside the UK dies · accessed Oct 2026
- GOV.UK: Tax on foreign income · accessed Oct 2026
- GOV.UK: Capital Gains Tax, market value (updated 2 Oct 2026) · accessed Oct 2026
- HMRC Capital Gains Manual CG78310: computing gains on assets bought and sold in foreign currency (updated 22 Oct 2026) · accessed Oct 2026
- United Trust Bank: Source of funds guidance (Dec 2025) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.