On the basis of a POA we have been responsible for the welfare of an elderly relative for some 5 years. Prior to the onset of dementia, she had resided in the United States for over 40 years. Five years ago she returned to the UK to enter a care home.
Her substantial financial assets remained in the United States under the supervision of her long time American lawyer and it is he who has funded her care home fees and other expenses. She has no assets in the UK.
During her time in the UK, a tax return has been submitted To HMRC each year detailing the income from her United States assets, but as tax in the United States was paid on her United States income the double taxation agreement meant that little or no UK income tax was due.
She has very recently died, and her will (drawn up and held in the United States many years ago) leaves the entirety of her estate to American charities. We have received conflicting advice of where probate must be obtained for this lady.
On the one hand it has been suggested that her estate must be dealt with in America under the tax supervision of the American tax authority.
And on the other it has been suggested that “as a UK national, resident in the UK, and submitting a yearly tax return to HMRC then it is HMRC who must deal with her worldwide assets (namely her assets in America)
It was the written wish of this lady that her estate goes to named United States charities in recognition of the many years she resided in that country and the fact that it was there that she acquired her wealth.
As legacies to charity they escape Inheritance tax in both countries, but we have been informed that HMRC IHT exemption in the UK is conditional on the legacies going to European Charities only. If this is the case then to meet the donners wishes it would be preferable for her estate to be dealt with in the United States. Is this feasible?
Informed comment would be greatly appreciated.
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