UK IHT Inheritance Tax Planning

For Hong Kong British Expats

After spending years away from the UK you may feel that on your premature death that your estate will not be liable for UK Inheritance Tax (IHT) – THIS IS INCORRECT

Now the important point is this; “As a UK Expat you have worked long and hard during your life”; supporting yourself and your family; providing for your family’s ongoing financial security – building your wealth!

Well HMRC are grateful and are waiting to claim 40% of your wealth!

The only question is  

“Would you rather not pay the 40% tax?”

UK IHT Is A Voluntary Tax

Everybody Can “Legally”

Avoid Paying It

UK Expat Inheritance Tax (IHT) HMRC Planning

 

Executive Summary (2011)

After spending years away from the UK you may feel that on your premature death that your estate will not be liable for UK Inheritance Tax (IHT) – THIS IS INCORRECT

A persons IHT liability is determined by where their parents are “Domiciled” (particularly their Father; as a consequence if your Father was born in the UK then your estate on your premature death will be taxed at 40% on any net assets above the “Nil Rate Band” (£325,000 in 2010-11).

Warning: Unlike UK Criminal Law where “You are innocent until proven guilty”; the legislation for UK Tax Law states that “You are guilty until proven innocent”.

So if HMRC states that your estate owes them say £500,000 on your premature death for IHT liabilities falling due. Then your estate (your beneficiaries) will have to pay it or prove in a court of law that your estate is not liable for IHT bill. Clearly it is not an easy task to prove a case against HMRC with UK legislation supporting them; in addition to the legal resources that they can bring to bear (this also means of course that there will be additional legal fees / costs for your estate, for your beneficiaries to settle).

Now the important point is this; “As a UK Expat, you have worked long and hard during your life”; supporting yourself and your family; providing for your family’s ongoing financial security – building your wealth!

Well HMRC are grateful and are waiting to claim 40% of your wealth!

The only question is

“Would you rather not pay the 40% tax?”

We hope you will find our “UK Expat Inheritance Tax (IHT) HMRC Planning Guide” informative, and that it highlights some of the vast financial planning opportunities that are available to you. Our guide is intentionally generic and therefore individual questions may arise that you would like answers to.

UK IHT Inheritance Tax Planning

For Hong Kong British Expats

The Facts

  1. If your parents (your Father) were born in the UK then you will be UK “Domiciled” and therefore liable for UK IHT on your premature death (no matter how long you have lived abroad).
  2. On your premature death the local authorities (no matter where you prematurely die) will establish that you are from the UK and they (under joint agreements) will inform the UK authorities; who will forward your details to the relevant UK bodies. This is how HMRC will be alerted of your premature death.
  3. HMRC will then make their enquiries to assess whether your estate is liable for IHT (the cut off amount is some £10,000.
  4. Any IHT amount is payable before any of your estate can be released to your beneficiaries (this can cause problems as no assets can be sold to pay the IHT).

The Solutions

  1. In many ways IHT is a “Voluntary” Tax. Yes that’s right a voluntary tax.
  2. With careful planning most people can “Legally” avoid paying this tax.

If you are a UK Domicile (parents born in the UK) and have net assets in excess of the “Nil Rate” band (£650,000 for UK domiciled married / widowed people, £380,000 for non UK Domiciled married / widowed people and £325,000 for single people and would like to avoid paying IHT.

Then lets get together so that we can discuss your options; after all you did not work all of your life so that your estate is left to HMRC instead of your beneficiaries (for example your children)

UK IHT Is A Voluntary Tax

Everybody Can “Legally”

Avoid Paying It

 How Can UK Expats Legally Avoid UK IHT

  1. Gifts and PETs (7 years rule applies) – Transfers money outside of your estate
  2. Life Insurance – Pays the IHT payment at a discounted rate
  3. QNUPS – Immediately transfers money (Cash) outside of your estate
  4. QROPS – Immediately transfers UK (Pension) money outside of your estate

UK IHT Inheritance Tax Planning

For Hong Kong British Expats

 

Interested In Exploring How to Legally

Avoid Paying IHT

UK Inheritance Tax (IHT) Planning For UK British Expats Hong Kong

UK Inheritance Tax (IHT) Planning For UK British Expats Hong Kong

Would you like to ask us a question or receive further information. Then please email us on our contact form, we will be pleased to answer any questions you may have.

This web page was written in 2015. For the latest information please download the latest FREE Expat British UK Pension Transfers QROPS GUIDE; QROPS information explained.

Contact Us First – +852 5307 3732

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