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inheritance in UK for a Belgian coming to live permenantly in UK

Greenway
Posts: 2
Joined: Mon Mar 20, 2017 5:47 pm

inheritance in UK for a Belgian coming to live permenantly in UK

Postby Greenway » Mon Mar 20, 2017 6:19 pm

Hello All

First of all thank you for this good system.

We are a Belgian couple , married without children. Now we are retired and would like to come and live in England.

This is our problem and are our questions :

when one of us would die, we would like to be free of inheritance tax ( exempt of inheritance tax.). We just would have to make a will and come and live permenantly in UK.

question :
1. is this right and how many years do we have to be living in UK to be subjected to this system ?
2. is this even possible when we would live in UK but being considered als non-dom (savings left in other country / no capital gains tax to pay).

many thanks for the answers.

end.

AnthonyR
Posts: 42
Joined: Wed Feb 08, 2017 2:33 pm

Re: inheritance in UK for a Belgian coming to live permenantly in UK

Postby AnthonyR » Mon Mar 20, 2017 8:26 pm

UK inheritance tax for non-domiciled individuals is only chargeable on UK assets. This means that as a married couple, if your UK assets are below £650,000 there is no IHT to pay. If your UK assets include a property that you left to your children/grandchildren you would also benefit from a further allowance of £100,000 each, which increases to £175,000 over the next three years, although I appreciate you say you don't have any children.

As long as you do not remain resident in the UK for more than 17 years then your non-UK assets are not subject to UK inheritance tax. After 17 years your will be subject to UK IHT on your worldwide assets.

Obviously you need to also consider the Belgian tax position and who you leave your assets to.
Anthony Rogers CTA
Fusion Partners LLP
anthony@fusionpartners.co.uk

maths
Posts: 6379
Joined: Wed Aug 06, 2008 3:25 pm

Re: inheritance in UK for a Belgian coming to live permenantly in UK

Postby maths » Mon Mar 20, 2017 10:17 pm

On the face of it you are currently non-UK domiciled for UK tax purposes under our common law.

If the reality is that you both intend to live in the UK permanently or indefinitely then on arrival in the UK you will each acquire immediately what is referred to as a UK domicile of choice. If this were to happen then you would be exposed to UK income tax, capital gains tax and inheritance tax on your worldwide income, gains and assets. A possible disaster.

How you answer the various questions asked on the UK tax and Immigration forms is extremely important.

To avoid the above tax consequences (arising from a UK domicile of choice) effectively requires that you do not have the intention to remain in the UK permanently or indefinitely.

someone
Posts: 22
Joined: Mon Feb 13, 2017 10:09 am

Re: inheritance in UK for a Belgian coming to live permenantly in UK

Postby someone » Tue Mar 21, 2017 9:07 am

It's not obvious what you are trying to achieve here.

I know absolutely nothing about Belgium tax law at all but I'm guessing that what you're trying to do is avoid any inheritance tax when the first of you dies (which is the usual case in the UK but presumably not in Belgium) and that you don't really care so much about the situation when the second of you dies (as you have no children, I'm assuming that you want the benefit of your assets while you live)

From the other answers given, it sounds like there are some very important questions that will require the correct answer to UK tax and immigration when you move to the UK to achieve the correct result. I'm not sure if these are answered at the border or later. But I would suggest that you probably do need to talk to a tax professional (maybe several as there are different tax regimes that you need to consider)

Another complication will be Brexit. You will be allowed to come and live here now and, I think, for the next two years, but there's no guarantee that you'll be allowed to stay beyond that (assuming that you don't already have the right to live here).

Greenway
Posts: 2
Joined: Mon Mar 20, 2017 5:47 pm

Re: inheritance in UK for a Belgian coming to live permenantly in UK

Postby Greenway » Tue Mar 21, 2017 5:03 pm

Dear all,


Thank you for the replies. I think I need to send you some more information.

These are our intentions and wishes :

1. we are currently living in Belgium as a (newly) retired couple . We don't have children. we only have a niece.
In Belgium
- we don't have to pay incometax on our pension.
- we pay 30 tax only on dividends and on the interest of our savings
-we don't have to pay capital gains tax
-we would pay 29 % inheritance tax when the first partner (of us) would die and our niece would pay 65 % tax after the death of the second partner.

2. We love England and would come and live in England (not in Suisse or in tax heaven) because we love your country and its people.

3.We would like to find a system in UK
a/ where "our niece" would only pay inheritance tax after the death of us both (so no inheritance tax after death of first partner)
b/ where we don't have to pay capital gains tax but only something like taon dividends and interest (they adviced us the non-dom system but this gives problems with the inheritance tax...)

4.We paid 3 different tax lawyers for tax advice here in Belgium but they are -in my view- not well known with the UK system and I paid a tax lawyer in UK and got also advice from an international bank-tax- lawyer.
All these 5 gave us a different explanation and all this was not conclusive. We are hopeless for the moment .

thank you for a clear advice .

robert and patricia

AnthonyR
Posts: 42
Joined: Wed Feb 08, 2017 2:33 pm

Re: inheritance in UK for a Belgian coming to live permenantly in UK

Postby AnthonyR » Tue Mar 21, 2017 6:57 pm

What's the rough value of your assets? Where are they located? Is the intention to sell your Belgian home and purchase a property in the UK?

In the UK all assets can be passed to a UK domiciled spouse without any inheritance tax and any unused reliefs (ie the £325,000 nil rate band) can be transferred as well giving a total of £650,000 exemption. If you are non-domiciled then the spousal exemption is limited to £325,000 - but the surviving spouse can choose to be treated as domiciled in the UK giving you unlimited IHT free transfers, although this is an irrevocable election meaning that worldwide assets are subject to UK IHT on the second death.

The result of this is if your joint assets are under £650,000 then there is no IHT in the UK, if they are significantly more then that, there's more to discuss!
Anthony Rogers CTA
Fusion Partners LLP
anthony@fusionpartners.co.uk

maths
Posts: 6379
Joined: Wed Aug 06, 2008 3:25 pm

Re: inheritance in UK for a Belgian coming to live permenantly in UK

Postby maths » Tue Mar 21, 2017 10:21 pm

4.We paid 3 different tax lawyers for tax advice here in Belgium but they are -in my view- not well known with the UK system and I paid a tax lawyer in UK and got also advice from an international bank-tax- lawyer.
All these 5 gave us a different explanation and all this was not conclusive. We are hopeless for the moment .


What you are trying to do is not "rocket science". I'm bemused as to why the advice received to date is not consistent.

If you are non-domiciled then the spousal exemption is limited to £325,000 -


If you and your wife are both non-UK domiciled (as seems prima facie likely) there is no inter-spouse limit regarding transfers for IHT purposes. The only limit applies where a UK domiciled spouse transfers to a non-domiciled spouse.


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