If you have been working abroad or living abroad for a while you may think you have escaped the clutches of HMRC and the UK tax regime. However there is one important area of UK tax legislation that many British expatriates find almost impossible to escape; Inheritance Tax. This is because IHT is based on the concept of domicile rather than residence and domicile, which is usually acquired at birth, can be very tricky to shake off no matter how long you have been living overseas.
Your problem is that if you are UK domiciled HMRC will want to tax your worldwide assets when you die and whereas residency follows a relatively simple set of rules domicile can be shrouded in mystery. Retaining a connection with the UK be that property, business or even something innocuous like a football season ticket or golf club membership can have HMRC deciding that you always intended to return home and therefore your worldwide assets will be subject to IHT and your estate taxed at 40% on everything above the 0% £325,000 individual threshold.
The good news is that there are a number of different, credible solutions dependent on your own individual circumstances to remove or reduce IHT. These could be anything from insurance to a special trust arrangement or a pension scheme with added benefits or maybe even a recommendation that you give some assets away. Remember wealth preservation and risk mitigation are critical to ensure capital can be successfully transferred to the next generation.
Whilst you are not going to be directly affected (you have to be dead before IHT is applied!) don’t you owe it to your loved ones to do what you can to minimise this tax which seriously jeopardises their future prosperity.
Ask us now to carry out an IHT review of your potential liabilities.
You can reach us on + 44 207 998 0570
