How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3125
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

Regarding Inheritance Tax: If my father was domiciled in Hong

Customer Question

Regarding Inheritance Tax: If my father was domiciled in Hong Kong, where grant of probate was issued and his estate exceeds the the UK tax threshold of 325K am I still liable to pay UK inheritance tax since as a beneficiary I am based in the UK. Under HK law no tax would be due.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question. I am very sorry to hear of the death of your Father.
You are not liable for any Inheritance Tax (IT) on the decease of your Father. It is his estate which is liable through his executors. No tax would cascade down to you, although the quantum of your inheritance would obviously be reduced by any IT imposed, but it would never be your liability, save in one case. If your Father made a gift of moneys or assets to you within seven years of his death you might bd liable and even then only if his estate is insufficient to meet any IT due on the gift. Such gifts create Potentially Exempt Transfers (PETs). PETs run off at a taper over seven years and are added back to the deceased's estate, being the first to suffer IT. It is in that situation only, if the estate cannot meet the IT, would it ever become your personal liability.
I do hope I have helped set your mind at rest on this matter.
Customer: replied 2 years ago.

Hi Keith, thanks for your help, but I didn't feel you answered my question, maybe I wasn't clear enough.

I am the executor of the will. My father lived and died in Hong Kong and the grant of probate was issued in HK and he was domiciled there.

Therefore I need to know if the estate is liable to pay any UK inheritance tax, since under the laws of Hong Kong, none is due

Thank you

Stuart

Expert:  bigduckontax replied 2 years ago.
Stuart, I am a diabetic and must eat now. I will be back to you in response shortly.
Expert:  bigduckontax replied 2 years ago.
Stuart
Here is the Gov UK advice on IT liability of your Father [edited]:
'[Domiciled and resident] outside the UK [Assets] - in the UK (except excluded assets) So, as you surmise any estate in excess of 325K plus certain bequests (inter spousal, charitable) are liable to UK IT at 40% flat rate.'
So, Stuart, there is an IT liability based on his UK assets only to be met from your father's UK estate, but not you personally save for PETs which I have explained already. You can dismiss any HK estate from your mind.
I do hope that I have helped you with your question.
Customer: replied 2 years ago.

Hope you managed to get some lunch

There are NO UK assets to speak of, just money from a savings account and investment fund held off shore in the Isle of Man - so I assume those are exempt?

Expert:  bigduckontax replied 2 years ago.
Breakfast, actually, as I am answering this question from the States!
In Isle of Man investment opens a potential can of worms. I will be back to you shortly; however I need to know precicely what is the IOM fund.
Customer: replied 2 years ago.

Its an Investment Fund held with Royal Skandia, arranged through a broker in HK

NB; my father had not lived in the UK since 1974, had no UK assets, he was domiciled in HK

Expert:  bigduckontax replied 2 years ago.

HMRC's Inheritance Tax Toolkit includes the following gem:

'The Channel Islands and the Isle of Man are considered outside the United Kingdom (UK) for Inheritance Tax purposes.'

It would thus appear that the IOM fund does not comprise part of your Father's UK Estate as he was not domiciled or resident in the UK, leaving the savings account only. If the sum involved is small HMRC may not require you to complete an IT return at all.

I would be inclined to check with them for starters, might save a lot of hassle and form filling. At this stage a return appears to be an exercise in financial futility!

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3125
Experience: FCCA FCMA CGMA ACIS
bigduckontax and 2 other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.
Expert:  bigduckontax replied 2 years ago.
Many thanks for the bonus too!

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions