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TaxRobin
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Domicile question & inheritance tax liability I believe I

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Domicile question & inheritance tax liability
I believe I am a non UK (German) domicile for UK inheritance tax purposes as I am a German citizen & have lived & worked in the UK since 2006 only.
If I inherit assets from my husband, a UK citizen living in UK, before I lived in the UK for 17 years, do UK inheritance tax or German inheritance tax rules apply to me?
Could I become a “UK domicile of choice” before having lived in the UK for 17 years and what would I need to do in order to become one? I have lived in the Republic of Ireland since 1999, own our house in London together with my husband & have set up a UK limited company in 2012.
If I inherit assets from my mother, a German citizen & resident, before I lived in the UK for 17 years, do UK inheritance tax or German inheritance tax rules apply to me?
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Hello and thank you for using Just Answer,
You stated you reviewed the HMRC guidelines and that is good but maybe looking at the basics of inheritance tax in the UK would be best.
Inheritance tax is paid by the estate of the deceased. Generally the beneficiary does not pay an inheritance tax.
There are a few instances when you would have to pay the tax:
you receive a share of an estate after a death
you receive a gift from someone who dies within seven years of making the gift
you benefit from assets in a trust at the time of death or receive income from those assets
you are the joint owner - other than a spouse or a civil partner - of a property

A UK domiciled person's estate usually doesn't owe Inheritance Tax on anything they leave to a spouse or civil partner who has their permanent home in the UK. Where the spouse or civil partner to whom the assets are transferred does not have a UK domicile there is a lifetime limit (cap) on the value of the assets that can be transferred free of tax. The cap is currently £55,000. Any amount over that would have fallen to UK inheritance tax.


The inheritance tax is on UK and if the deceased is not a UK domiciled individual then their estate is not subject to UK taxation.
Any inheritance you received from your mother (German resident) would not be liable for inheritance tax in UK.

I would suggest you bring your concerns to your personal tax advisor in addition to your research.

My goal is to offer you excellent service, please let me know if there is something else I can assist you with.
Customer: replied 3 years ago.
Hello,
I think that my question isn't completely answered. Am I a uk domicile or not right now? Is it correct that I automatically become a uk domicile after having lived in the uk for 17 years?
If I am not a uk domicile in your opinion right now, then please answer my question in regards XXXXX XXXXX of choice.

Thanks,
Paula
Expert:  TaxRobin replied 3 years ago.
Yes you are a UK domicile after having lived in the UK for 17 years. If you have been resident in the UK for 17 years and continued with no intention of leaving then you made the choice.
Customer: replied 3 years ago.
Sorry but you did not answe my question whether I am a uk domicile right now
Expert:  TaxRobin replied 3 years ago.
Yes you are. Your domicile is the domicile of choice because you have been living in the UK for the past 17 years. Your domicile was a choice because it was not one of the other 2.
There are three types of domicile:
domicile of origin
domicile of dependence
domicile of choice

You were not born there (and assuming your father was not) and you are not young enough to be dependent.
Customer: replied 3 years ago.
In my original question I told you that I have lived in the uk since 2006 only. That makes 7 years to me and not 17 years. So am I a UK domicile right now or not? If you can't answer the question then please let me know
Expert:  TaxRobin replied 3 years ago.
You are both domiciled and resident in the UK if you have lived there and have your main home there for the past 7 years. Sorry about the 17 but I picked that up from your post and thought maybe you had accidentally mistyped when you originally said 7.
Your domicile is normally where your main home is and that you intend to return to when you travel.
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Experience: International tax
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