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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am a Swedish citizen and UK resident since 1987. My two

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I am a Swedish citizen and UK resident since 1987. My two children are also UK residents. I wish to give them a lifetime gift in the form of a flat I own in Stockholm (present value approx £180,000). What re the UK tax implications if I die before 7 years have past since gift?


As you have been resident in the UK at least 17 of the last 20 years (changing to 15 out of 20, see below), you have acquired a deemed UK domicile so your worldwide estate will be liable to UK IHT in the UK. The nil-rate band of £325,000 is first used against gifts made in the seven years before death. Any part of a gift not covered by the nil-rate band may incur a lower IHT liability due to taper relief which you can read about here. There is some useful information on IHT and double tax relief here.

The gift of a property is a disposal for Capital Gains Tax purposes, the same as if you had sold it for its open market value. As things stand now your capital gains are free from UK CGT if you do not remit the gain to the UK. However, whilst there is no cash gain here, as your sons are UK resident, I would say that the "gain" will need to be disclosed to HMRC. You may be entitled to some main residence relief and letting relief if the property was ever your main home and let for letting relief purposes. You can read about the main residence and CGT here. See section 9 of RDR1 here for information on the remittance basis of assessment.

From April 2017, as you can read here, it is proposed that non-domiciled individuals who have been in the UK for 15 out of the previous 20 years will be deemed to be UK domiciled and taxable on all theirworldwide income and gains as a UK domiciled individual is. The remittance basis of assessment will no longer be available for such individuals. These are just proposals right now but are likely to be enacted even if in a chnaged form once representations have been considered.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.

Thank you, ***** ***** has given me lots of information to chew on.


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