Content
Brave New World
Business Not Pleasure
Summertime Blues
All That Glitters...
Casting The Net
Trust Gordon?
It Ain't Over...
One In The Eye
Keep Your Nose Clean
Foreign Affairs
When Is A Car...
Don't Walk Away
Avoiding, The Issue
Brown Is Anti-PC
VAT's Up Doc?
Fuel's Gold
An Age-old Question?
That's Unfair!
Year In Year Out
How Hard To Try?
It's A Rip-Off!
Outlaws Win
Show Some Restraint
Not Our Problem
They Cannot Be Serious?
Merry-Go-Round
Pension Disappointments
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People who are "domiciled" outside the UK have some tax advantages - they don't have to pay income tax or capital gains tax on foreign sources as long as they leave the money overseas, and they don't have to pay inheritance tax on assets that are abroad. Foreign domicile usually means having foreign parents and not establishing a long-term connection with the UK - even if you have lived here all your life, you might still be "foreign" in this sense if your parents came from somewhere else and you maintain family links there. It's worth being aware of the advantages, and we can discuss them with you. But there are also some possible disadvantages. The inheritance tax rules normally exempt any transfer between husband and wife, during life or on death - it's one of the most important IHT reliefs. To stop a UK person with a foreign spouse transferring chargeable assets first to the spouse and then offshore, outside the tax net, the total exemption for transfers to a non-UK domiciled spouse is restricted to only £55,000. That is potentially a big problem where a UK person has married someone from abroad and assumes that their house will be IHT-free on death because it is left to the other party. Although marrying a UK person and coming to live here might look like taking on a UK domicile, it isn't necessarily so. It's certainly possible to keep some of the tax advantages of foreign domicile in that situation, so you can bet that the Revenue will argue that you keep the disadvantage as well. If you think this might affect you - if you suspect that you are UK domiciled and your husband or wife is foreign domiciled for tax purposes - we will be happy to talk through the risks and options with you. |
© Bayar Hughes & Co., 2010.