Five common mistakes UK expats make about domicile and tax
By Kirsten Hastings, 19 Jul 17
British expats still have some crucial misunderstandings about their domicile status and tax position that could leave them and their loved ones financially exposed and even land them in trouble with HM Revenue & Customs, warns Rachael Griffin, financial planning expert at Old Mutual Wealth.
A staggering 82% of UK expats do not realise that both their UK and world-wide assets could be subject to UK IHT, OMI found.
Griffin explained: “As most British expats will still be deemed UK domiciled on death, it is important that they understand that this means their worldwide assets will become subject to UK IHT.
“A common misconception is that just UK assets are caught. This lack of knowledge could have a profound impact on beneficiaries.
“Before probate can be granted, the probate fee and any inheritance tax due on an estate must be paid.
“With UK IHT currently set at 40%, there could be a significant bill for beneficiaries to pay before they can access their inheritance. Setting up a life insurance policy could help ensure beneficiaries have access to cash to pay the required fees.
“Advisers setting up policies specifically for this purpose must ensure they place the policy in trust to enable funds to be paid out instantly without the need for probate.”
Tags: CGT | Domicile | IHT | Old Mutual | Rachael Griffin
