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Inheritance Tax & my Overseas Assets?

Your domicile status can impact your tax position in numerous ways, especially in relation to UK Inheritance Tax (“IHT”).


What is Domicile?

Domicile is a common law concept with years of case law and can broadly be described as an individual’s permanent home and where they plan to live permanently or indefinitely. You can only have one domicile at any one time.


Why is domicile relevant to Inheritance Tax?

If you are domiciled in the UK immediately prior to your death, then UK IHT will be chargeable on your worldwide assets. In contrast, if you are not domiciled in the UK, your estate will only be subject to UK IHT on your UK assets.


Deemed Domicile – Am I deemed to be UK Domiciled?

With effect from 6th April 2017, there are three situations in which you can be deemed to be UK domiciled for inheritance tax purposes (IHT) by HMRC.


  1. If you have been UK domiciled, then you move abroad and make another country your permanent home, you will retain your UK domicile status for three years.

  2. Long Term residence - If you have been in the UK for 15 years out of the previous 20 tax years. You will be classed as deemed domiciled

  3. Formerly domiciled residents - An individual is deemed domiciled is deemed domiciled in a tax year if:

  • You were born in the UK, and

  • Has your domicile of origin in the UK, and

  • Is UK resident in that tax year.

If you meet the conditions to be deemed UK domiciled, UK IHT will be chargeable on your worldwide assets.


If you are unsure about your UK domicile status for IHT purposes and believe that the deemed UK domicile rules may be applicable to you, you can talk to us to establish your position and plan away forward by book a FREE no obligation telephone meeting here.

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