A Guide To INHERITANCE TAX - St James's Place

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By living abroad for a few years, you may have become ‘nonresident’ but the UK tax authorities may still regard you as a ‘UK-domicile’. Although you can take steps to demonstrate you have changed your ‘domicile’, HMRC is unlikely to confi rm that this has been achieved until you have died, so careful contingency planning is always advisable. Your domicile is typically influenced by the domicile of your parents but also your place of birth and where you have been brought up. You can change domicile by moving permanently abroad, but to achieve this you would effectively need to sever all ties with the UK, such as ceasing to own a UK property or belonging to a UK club. So how do you determine your IHT exposure? The calculation is often, although not always, simple. Broadly, you count up the value of all the assets remaining on death, subtract the Nil Rate Band and what is left is taxed at 40%. If your spouse dies before you without fully using their Nil Rate Band the proportion of the unused amount can be carried forward to use on your death. However it is still legally possible to ensure that as much of your estate as possible stays out of HMRC’s grasp – and that can be done by seeking specialist, professional advice. Careful IHT planning is all about passing as much of the proceeds of an estate as possible to chosen beneficiaries rather than to HMRC. It is also about maintaining flexibility and control over any arrangements that are made. 6 PARTNERS IN MANAGING YOUR WEALTH
What to do about Inheritance Tax The first step is to decide to do something and then to do it. Planning may include: • Drawing up a Will and ensuring it properly expresses your wishes and is planned correctly to save the maximum amount of tax. • Transferring assets through the prudent use of lifetime gifts. • Creating an IHT-efficient fund to enable beneficiaries of an estate to meet the tax liability without disturbing family wealth.
Page 1 and 2: A Guide to INHERITANCE TAX PARTNERS
Page 3 and 4: Inheritance Tax - some facts Whethe
Page 5: Inheritance Tax what it means to yo
Page 9 and 10: Using trusts A suitably worded trus
Page 11 and 12: Tax efficient funds The Alternative
Page 13 and 14: Summary It is better to do somethin
Page 15 and 16: We do not believe in off-the-shelf

A Guide To INHERITANCE TAX - St James's Place

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