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bigduckontax
bigduckontax, Accountant
Category: Tax
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I am a foreign national living abroad, but have a

Customer Question

I am a foreign national living abroad, but have a substantial amount of money in a uk account.These are my only UK assets What inheritance tax am I likely to have to pay.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith,one of the experts on Just Answer, and pleased to be able to help you with your question.

Only a person domiciled in the UK is liable to UK Inheritance Tax (IHT). Domicile [according to Experts for Expats Web site] will often be established according to three factors: where you were born, if you have assets in that location and where your father was born. When it comes to determining your country of domicile, the tax man will interpret the conditions and draw their own conclusion about whether you are still domicile in the UK. Due to inheritance tax being such a major revenue earner for the UK government, changing your domicile can be a difficult and stressful process - and even then your efforts may not be considered enough. It takes at least 16 years to remove an UK tax domicile.

Thus it would appear that there is, in your case, exposure to IHT. Any assets exceeding 325K (increased by any inter spousal or charitable bequests) will be taxed at a flat rate of 40%. If 10% or over of your estate is charitably bequeathed the rate falls to 36%. You will be liable for equivalent taxation in the country in which you reside, but if that country has a Double Taxation Treaty covering IHTs then your estate is not taxed in both jurisdictions, the tax paid in one being allowed as a tax credit against liabilities in the other.

I do hope that my reply has been of assistance.

Customer: replied 12 months ago.
helpfull information.Thank you
Expert:  bigduckontax replied 12 months ago.

Delighted to have been of assistance.

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