Guernsey to UK Inheritance tax

[jaseuk]

My father devastating recently passed. He was UK born but domiciled to Guernsey for the last 14 years. I am his son and in his will. I am a resident of the UK (Herefordshire), what are the rules on inheritance for me and my sibling? Will I have to pay 40% tax?

[AnthonyR]

Inheritance tax is charged on the estate of the deceased (apart from gifts within 7 years of death).

Individuals who are non-domiciled are only charged on their UK assets, so if your father was non-domiciled (which can be difficult to prove if he was originally UK domiciled - unless he has clearance from HMRC), and had no UK assets then there will be no IHT on the estate. If your father had UK assets these will be taxable at 40% in so far as they exceed the nil rate band of £325,000 (and the residence nil rate band if appropriate).

However, if he sought to change his domicile from UK but retained assets and connections in the UK then HMRC may argue that he remained UK domiciled and as such his worldwide estate is subject to UK inheritance tax.

If there is any doubt I'd recommend you seek some advice from a specialist as it's a complicated area.