Sam Orgill www.proactpartnership.com highlights UK Budget Changes require new approach to Wills and Property Investment for Expats. It’s time to review or make a will
The UK post-election Budget introduced , in theory a 1 million pound Inheritance Tax allowance for UK Domiciled nationals. But only those with the right assets, and the right family conditions, can benefit. Expats with Property or investments abroad are still subject to the 40% Inheritance Tax Rate on death.
The UK has one of the highest Inheritance tax rates in the world, outstripping France, Japan and Belgium. While the headlines sound and feel good the reality can still be expensive.
Inheritance Tax Budget Changes
The Inheritance tax allowance is unchanged at £325,000 per person. If married at death then this amount can be passed to the spouse, tax free. Then on second death the children can inherit £650,000.
What has changed is the introduction of an additional £175,000 ‘Family Home Allowance’ per person. This will be phased in for deaths between 2017 and 2021. This takes individuals potential Inheritance Tax Free Allowance of £500,000
To get a £1m Inheritance Tax Allowance – and make an additional £140,000 Inheritance Tax Saving, you will need to:
1. Be married
2. Have a main Family Home worth £350,000 plus.
If you are not married or divorced then you can only leave £500,000 inheritance tax free. But With a main Family Home worth £175,000 you make an additional £140,000 Inheritance Tax Saving
If your main home is not worth enough then you will be stuck at the £325,000 allowance each.
Inheritance Tax Bill
Everyone will be different. Marital status, property ownership has an impact. For Expats the added feature is that the HMRC definition of Main home refers to property in the UK. If you qualify as non-resident for tax in the UK, how can the property be your main home? A main overseas property home may not count as main family home for the inheritance tax allowance. Nor would residentially let property that has a tax record of being rented out, be allowable.
Expats living and working abroad may not be able to gain any benefit from the new family home allowance.
There is no inheritance tax, or property transfer taxes, on Cyprus property transferred between family. But UK Inheritance tax could still apply at 40% on your overseas property in Cyprus, Spain or France.
Make a Will & Review Checklist
1. Do You Need to Make A Will?
2. What Assets have you got where
3. What are the Probate Requirements and Inheritance Tax Liability
4. Will you gain from the UK inheritance tax changes for main family home
5. Can Administration changes make Inheritance Tax Savings
6. Can Gifts be made during a lifetime to achieve Inheritance Tax Savings
7. Are family members appointed to keep control of your estate?
8. Have you made provision to avoid 40% UK inheritance tax on offshore assets? Can Making a Will for overseas assets do this?
9. Have you a Will for each jurisdiction in which you own assets? This can save time, money and inheritance tax
10. Is your current Will still reflect your intentions
ProACT Expatriate Tax Advice
ProACT can also assist and offer free review and advice to Make a Will, provide updates or revisions as required. This may just give you piece of mind, but also ensures that when the Will is needed, unforeseen problems, expense and inheritance taxes are avoided.
ProACT Partnership Expatriate Advice offer professional services for living, working, retired or relocating abroad. Make a Will, administration services in Cyprus UK, inheritance tax savings and tax returns. Contact Us for a Free Review.
Sam Orgill - ProACT Partnership - Tax Saving Experts
TAX - BUSINESS - WILLS & ESTATES - IMMIGRATION - PROPERTY SERVICES
ProACT Partnership - Expatriate Advice - Tax Saving Experts
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