Tax implications for EU citizen living/working in UK when their parents die.

[ian@phy.hw.ac.uk]

My partner's father died recently in Finland (an EU country) leaving her with a substantial inheritance. She has lived, worked and paid tax in the UK as a self-employed person for the past 7 years and will continue to do so. Is she liable for inheritance tax in the UK?

Ian

[Taxbar]

Dear Ian,

The critical Issue for your Partner is her Domicile.

That put simply means the country which she has selected as her personal home and whose private law she is governed by.

Domicile is a complex legal concept, but retaining a Domicile in Finland would avoid UK Inheritance Tax on Non-UK assets, until your partner has been tax resident here for more than 17 out of the last 20 tax years.

Similarly, for income and capital gains tax she will only be taxed on any sums she brings into the UK.

There are of course tax planning measures that can avoid all the above taxes, for a Person Domiciled abroad.

This is an area is one of my specialities and I would be happy to advise your Partner on how to structure her affairs to avoid UK taxes.

Daniel Feingold ( Editor of the UK & International Tax Law section of Taxationweb)
Barrister (NP)
Strategic Tax Planning
International & UK Tax Consultants
Treen House 72 Park Road
Prestwich,
Manchester
E-mail sedrate@easynet.co.uk
Tel: 0161 720 7244