Inheritance tax for non-domicile

[fz]

I came to the UK 16 years ago and still have strong ties to my home country. I have assets worth about £500K abroad. Is there anything I can do now to protect these assets from IHT in the UK? Any advisers specialising in this area in Central or South London?

[maths]

The important issue is to establish your domicile status for UK tax purposes.

This is not as straight forward as many people think.

However, with respect to inheritance tax only, if you have been resident in the UK for at least 17 tax years out of the last 20 such years then you will be "deemed" domiciled in the UK and your overseas assets will be charged to inheritance tax on gift and/or death subject to various exemptions (eg first £285,000 taxed at 0%; therefater 40% on death).

You seem possibly periously close to satisfying this test.

If you as yet have not breached this 17 out of 20 tax year test then you still have time to, for example, transfer these assets into an offshore trust which will put them outside the scope of inheritance tax.

Alternatively, if you wish to keep hold of the assets (ie not use a trust) then any possible future IHT liability could for example be dealt wth by way of insurance.

Bottom line, in view of your closeness to the 17/20 rule is to take speciifc advice as to your domicile status (not relying on this forum) and then go from there.

Time is not on your side!!

[Tosh]

The trust maths was referring to is an 'Excluded Property Trust'

Providing you are not yet deemed domiciled, putting your overseas assets into it will immediately remove them from your IHTable estate

Tosh
toshmalone@hotmail.co.uk