Euro Weekly News - Costa de Almeria 18 - 24 July 2019 Issue 1776

FEATURE www.euroweeklynews.com 27 June - 3 July 2019 21
EWN
Do you know where you are domiciled?
Are you sure?
For British expatriates, understanding
domicile is an important element of
estate planning. It is domicile, not
residence, that determines your
liability for UK inheritance tax.
Domicile is a complex and
incredibly adhesive UK common law
concept. The basic rule is that a
person is domiciled in the country in
which they have their permanent
home - regarded as your ‘homeland’.
However, you can remain UKdomiciled
even after living abroad for
many years.
There are three types of domicile
under English law:
• Domicile of origin - where a child
takes their father’s (or single/
unmarried mother’s) domicile (not
necessarily their country of birth).
• Domicile of dependence - applies
to women married before 1974
(whose domicile will mirror their
husband’s) as well as minors and
other legal dependents.
• Domicile of choice - acquired
by moving permanently to
THE PSOE asked Podemos-
Unidos to accept that there will
be no coalition.
The party emerged from the
April 28 general election with
124 of the 176 seats necessary
for a parliamentary majority.
The PSOE’s presidential
candidate Pedro Sanchez needs
the 42 seats won by Unidos
Podemos - the left-wing
Podemos and Izquierda Unida
alliance - but in return,
Podemos leader Pablo Iglesias
wants ministries or a vice-presidency.
Sanchez’s offer of intermediate
ministerial posts is not what
Iglesias wants, but insiders say
that nobody trusts Iglesias to
toe another party’s line.
Warning bells sounded last
May when the Podemos-
Unidos members of the Mesa
de Parlamento - the Speaker
and representatives from the
principal parties - voted against
barring remanded Catalan MPs
By Gerald Turner,
Partner,
Blevins Franks
another country.
While changing domicile is
possible, this needs to be a carefully
considered process as there are no set
rules - much depends on your
particular circumstances and
intentions. If challenged by HM
Revenue and Customs (HMRC),
the onus is on you - or, rather, your
heirs - to prove you were non-UK
domicile at the date of death.
Changing domicile
To acquire a domicile of choice
you must be physically present
and tax resident in your new
country, intend to live there
permanently, and not foresee any
reason to return to the UK. You
need to sever as many ties as
possible with the UK, as HMRC
will look for any indication that
you see Britain as your homeland
and may return one day. Stating
in your will that you wish to be
buried in the UK, for example,
could work against you.
Even if you adopt a domicile of
choice outside the UK, it can take
up to four years to shed a UK
domicile for inheritance tax
purposes. HMRC may treat you as
UK-domiciled if you:
• were UK resident for 15 of the
last 20 tax years
• return to Britain for more than a
year (if the UK is your domicile of
origin and place of birth)
• move to a third country - until
you can demonstrate you have
established a new domicile of
choice.
THE WEEK IN POLITICS
High price for 42 seats
PEDRO SÁNCHEZ: Needs the seats won by the alliance
Unidos Podemos led by Pablo Iglesias.
European
ambitions
from taking their seats in the
national parliament.
This, it was felt, could be a
sign of things to come, confirming
the PSOE hierarchy’s
desire to keep Iglesias at arm’s
length. The PSOE’s Organisation
Secretary, Jose Luis Abalos,
confirmed that if necessary
Sanchez will go to the Investiture
debate without having obtained
sufficient backing to
form a government.
Should that fail, he will have
another two months to try
again or call another election,
something that no party wants
but which, paradoxically, could
finally benefit Sanchez.
FOREIGN MINISTER Josep
Borrell headed the PSOE’s
voting list in the European
elections, although his future
in Brussels is still undefined.
Borrell leaves the Ministry
this coming Friday and told
The effect of domicile on
inheritance taxes
Anyone who is deemed UKdomiciled
is liable to 40%
inheritance tax on their worldwide
assets (since April 2017, this
includes all UK residential
property). There is an individual
tax-free allowance of £325,000,
transferable to your spouse or civil
partner, plus a £125,000 ‘family
home allowance’ (increasing to
£150,000 this April and £175,000
in April 2020).
As well as UK tax, you could be
liable to Spanish succession tax.
However, in most cases the UK
would give credit for the tax paid
overseas to avoid double taxation on
the same asset.
Non-UK domiciles are only liable
to UK inheritance tax on assets
situated in the UK.
The best approach
Domicile is a complex area,
particularly for inheritance tax
purposes. If you are looking to claim
change of domicile, or there is a
significant amount of UK
inheritance tax at stake, take
specialist, personalised advice.
Whether or not you have UK
domicile status, there are tax
planning arrangements available to
reduce your liabilities to inheritance
and other taxes. Blevins Franks are
experts in this area and will help you
establish your domicile status, how
inheritance tax interacts with
Spanish succession tax, and what
steps you can take to minimise
unnecessary taxes for your heirs.
Tax rates, scope and reliefs may
change. Any statements concerning
taxation are based upon our
understanding of current taxation
laws and practices, which are subject
to change. Tax information has been
summarised; individuals should seek
personalised advice.
Keep up to date on the financial
issues that may affect you on the
Blevins Franks news page at
www.blevinsfranks.com.
Damage limitation
CIUDADANOS leader Albert Rivera maintained the French president
Emmanuel Macron congratulated him on Cs’ recently-made
pacts. This news caused a stir as Rivera’s centre-right party has refused
to isolate the ultra-Right party Vox with the cordon sanitaire
used in France to exclude extremists.
Instead it joined Spain’s Partido Popular in pacts with Santiago
Abascal’s party to take over regional and local governments, earning
criticism at home and abroad. A defensive Rivera recently insisted
in Brussels, “Macron and the Elysee Palace support our
pacts and congratulated us.” Elysee Palace sources contacted by
the Spanish daily El Pais contradicted Rivera’s version. “We do
not confirm this information, which is inexact. There has been no
public or private declaration in this respect,” the sources insisted.
In Brussels, a Macron aide declared to a hundred reporters,
“The president has not congratulated Ciudadanos for these actions,
nor anything like it.”
Ciudadanos later clarified in an official communique that
Rivera was referring to congratulations from Macron’s party, La
Republique en Marche, “not Macron in his role as president of the
Republic.”
reporters that any future post
was “subordinate to the project”
although it is known
that Borrell wants one of the
top jobs.
He was president of the
European Parliament between
2004 and 2007, but
following Borrell’s good
showing in the European
elections, Madrid hopes that
the time has come for Spain
to take a more prominent
role in Brussels.