Search News


 

News

Lloyd & Co
Chartered Accountants

103-105 Brighton Road
Coulsdon
Surrey, CR5 2NG
020 8668 0500
This email address is being protected from spambots. You need JavaScript enabled to view it.

Source: HM Revenue & Customs | | 27/11/2018

The Inheritance Tax rules can be difficult to fathom when an expat or another person with connections to the UK living outside the country dies. The liability to Inheritance Tax in the UK depends primarily on the domicile of the deceased. If the deceased is deemed to be domiciled in the UK for tax purposes, they will generally be subject to Inheritance Tax in the UK regardless of where they died. It is important to note that this is different to being classed as a non-resident for tax purposes.

HMRC will treat any person who has been resident in the UK for more than 15 of the previous 20 years as deemed domiciled in the UK for tax purposes. The deceased will also be treated as being domiciled in the UK if they had their permanent home in the UK at any time in the last 3 years of their life.

If the deceased has a non-UK domicile, then Inheritance Tax is only paid on any UK based assets such as property or bank accounts in the UK. Inheritance Tax would not be payable on 'excluded assets' like foreign currency accounts, overseas pensions and holdings in authorised unit trusts and open-ended investment companies.

This a complex area and professional advice should be taken to minimise any liability to Inheritance Tax in the UK if someone is living abroad. The rules can also mean that there is a liability to Inheritance Tax in more than one jurisdiction and that double taxation treaties need to be carefully considered. Failure to take into Inheritance Tax planning into account could lead to a greatly increased tax liability.



Latest News

Gifts out of disposable income
12/02/2019 - More...
There is an annual Inheritance Tax exemption of £3,000 for gifts. This exemption can also be carried forward to the

What work is covered by the CIS scheme?
12/02/2019 - More...
The Construction Industry Scheme (CIS) is a set of special rules for tax and National Insurance for those working in the

When do you pay Capital Gains Tax?
12/02/2019 - More...
Capital Gains Tax (CGT) is normally charged at a simple flat rate of 20% and this applies to most chargeable gains made