Asia is becoming an increasingly attractive location for many Brits to live and retire.  With a better climate, international standard schools and medical care and a huge range of opportunities, countries such as Thailand are seeing an influx of migrants from the UK.  But whilst enjoying the sunshine and decreased cost of living, you still need to plan your legacy and consider your Inheritance Tax liability.

Some expatriates sever all ties, leave no assets and have no intention of returning to their original nation. For expatriates who leave the UK and obtain a new domicile, UK inheritance liability disappears on all but UK assets. It can be relatively easy to convert UK assets into non-UK assets and minimise UK inheritance tax on those as well.  It is imperative to have a separate UK law compliant will that deals only with these UK assets.

But even expats who own no UK assets may still face an inheritance tax claim on their estates. Tax treaties and other international agreements contain clauses under which foreign governments are duty bound to help collect tax.  Your death abroad will be reported to the UK authorities and this may trigger an investigation into your international estate and your UK tax liability. Making your main will under the law of your country of residence will aid any case you make for domicile outside your country of birth and can be used as evidence in case of double-taxation issues.

If you and your spouse or civil partner do not share the same domicile the amount of an estate which can be passed between spouses tax-free depending on whether the partners concerned are domiciled in the UK or not, and whether they are married or unmarried, is determined by Her Majesty’s Revenue & Customs (HMRC).

Inheritance tax has been described as a tax on people who fail to plan their estate tax efficiently. With careful planning and independent advice, it is possible to legally avoid a significant amount of inheritance tax in the UK. Multi-jurisdictional estates are by their very nature complex and professional advice should be obtained in all relevant countries to ensure smooth and tax efficient succession planning.  Contact Wills World Wide today to see how we can assist.