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Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 44898
Experience:  24 years experience. Admitted in New South Wales and the UK.
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I understand that there is no inheritance tax/ capital transfer

Resolved Question:

I understand that there is no inheritance tax/ capital transfer tax payable on the estates of Australian citizens. My father-in-law, who emigrated to Australia shortly after the Second World War , has estate in Australia of approximately £1 million, half in cash and half in a house in Perth, which he bought 10 years ago (its value is probably down on the purchase price)
He was involved in a car crash recently in the UK and has been diagnosed with dementia . Since both his children are now living in the UK they do not want him to move him back to a long term care home in Australia and have put him into an accessible home near Carlisle .
Are there any steps which we should take to ensure that, on his death, his estate is not liable to UK inheritance tax ?
Submitted: 2 years ago.
Category: Australia Law
Expert:  Leon replied 2 years ago.
Good Morning, My name is ***** ***** I am a NSW Solicitor. Thank you for your question, and will do my best to assist you with your question. Please understand this is not legal advise Please understand this is not legal advise but a guide to assist you.It all depends on whether the HMRC accepts that he is not domiciled in the UKhttps://www.gov.uk/inheritance-tax/when-someone-living-outside-the-uk-diesIf he is seen as living here then there is only inheritance tax on his UK assetsI suggest you look at getting a ruling form themIf he is living there now, they may deem him a UK domicile and he will pay Inhertence tax
Customer: replied 2 years ago.
Well.........with respect that was a statement of the obvious, and the site you refer to seems only to discuss brits. I was looking for some advice based on your judgement and experience of 18 years, like various things he ought to do/ or not do in order to protect his Australian domicile and his estate from UK IHT. I lool fwd to hearing if you can oblige. Regards
H
Expert:  Leon replied 2 years ago.
When he moves ot the UK his domicile changes.If you can get a ruling that he does not lose his Australian Domicile from the UK authorities then there is no IHTLeaving Australia causes him to start losing his domicile.If he never returns then his domicile is where he passes away.If he does not intend to return to Australia then his domicile changes.The rules for this are determined by the IHT rules not Australia. Australia will only deal with Australian laws and he will be affected there as well.If he leaves his home and rents it out and does not return in 6 years then he may be liable for Capital Gains Tax if it was purchased after 20 September 1985Also please understand I can only provide you with general information. I cannot give you detailed legal advise. It is clearly stated when you join the site. The information is legally based but it is not legal advise.
Customer: replied 2 years ago.
Good morning,
Thank you for your reply.
I asked a very specific question below in my first email
Are there any steps which we should take to ensure that, on his death, his estate is not liable to UK inheritance tax ?
You put in your first email in response that you do not give specific advice etc etc but in that case you should not have picked up the question. Unless you wish to re-address your stance in this matter I will post the question again to Just Answer
Expert:  Leon replied 2 years ago.
Good EveningHe has to live in Australia to be able to avoid the IHT I understand your disappointment, but if he lives in the UK then you will pay the IHT.If he is willing to pay stamp duty then you can take the property out of his name and transfer it to a trust and you can be a beneficiary of the trust as well as him. But the problem there is that you will need to have a person that is in Australia to be a trustee to keep the trust as Australian resident. But you cannot circumvent the law and void it otherwise. You have to take the asset out of his name. I hope this is clearer.
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