UK Members AND Inheritance Tax
I was just wondering what percentage of UK citizens living in Qatar are aware that they will still be liable for UK Inheritance Tax on their worldwide assets IF they maintain any ties to the UK??
I have met a few people who thought that because they were earning tax free and not paying sales tax that they would also not be liable to Inheritance Tax.
Sadly that is not the case; and Inheritance Tax would still be due.
Just wondering who out there did not realise this and thus need to do something about it??
Scott
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Thanks for sharing emgee.
UKeng
Perhaps you need to flag this in case it impacts other UK expats.
UK introduces a Statutory Residence Test (SRT)
as from April 2013
The UK Government is about to introduce a Statutory Residence Test which may also be used in other countries previously following the case law and practice on which tax residency was previously based.
The test will have three parts:
Part A
Where an individual satisfies any of the following conditions for a tax year, they will definitely not be a UK tax resident:
• Non UK-resident in all of the previous 3 tax years and present in the UK for fewer than 45 days in the current tax year
• UK –resident in one of the previous 3 tax years and present in the UK for fewer than 10 days in the current tax year
• Leaves the UK to carry out full time employment overseas and not present in the UK for more than 90 days in the tax year. Also, no more than 20 days are spent working in the UK during the tax year
Part B
Where part A does not apply: Individuals will be conclusively tax resident in the UK if they meet any of the following:
• Are present in the UK for more than 183 days in the tax year
• Have only one home and that home is in the UK e.g. their family live there and it is available for them to use
• Carry out full time work in the UK
Part C
This applies where part A and part B do not apply. Individuals will need to compare the number of days they spend in the UK with a number of ‘connecting’ factors, particularly where they spend in excess of 45 days in the tax year in the UK:
• Is the individual’s family resident in the UK?
• Does the individual have free access to accommodation in the UK?
• Does the individual have substantive work in the UK, even if it is not full time? e.g. more than 20 days in a tax year
• The individual spent more than 90 days in the UK in either of the previous 2 tax years
• Does the individual spend more time in the UK than in any other countries?
Further clarity is clearly required, and is expected during the first half of 2012.
N.B. From a practical standpoint, a contract of employment will satisfy the third condition in Part A for most individuals and therefore they will be able to satisfy conditions for non residency fairly easily.
Domicile is a legal term - it means you "belong" to a certain country - often the place you regard as your homeland. Your country of domicile is normally the same as your nationality, irrespective of residency. If you want to become domiciled in the country you are living in, you would have to prove to the Inland Revenue that you no longer have material connections with the UK, and that you are a permanent resident.
Even visiting family once a year would likely mean a change in domicile would be challenged AND having a UK bank account is a definite no-no.
IHT is based around your domicility (NOT where you are living and working), and if you are a UK domiciled person it is very difficult to change this without giving up ALL connections to the UK.
The P85 does not affect Inheritance Tax.
Sorry.
Scott
Scott what about P85 the form to declare that you are a non-resident for TAX purposes?
Scott I am going to copy and paste the above in British Group if you don't mind?