• Linkedin
  • Facebook
  • Instagram
  • Twitter
Whatsapp: +971 52 855 7084
Adrian Cartwright
  • About
  • Testimonials
  • Financial Services
    • Pension Transfer Advice
    • Trust & Estate Planning
    • Portfolio Design
    • Retirement Planning
    • UK National Insurance
    • Property Investment
    • Life Insurance
    • Education Planning
    • Foreign Exchange
    • Mortgages
  • Financial Products
    • Mutual Funds
    • ETFs
    • Bonds
    • Fixed Income
  • Helpful Guides
  • Get in touch
  • Menu
Article

Inheritance Tax – The Forgotten Tax

For British expatriates the reduction in income tax on salary that comes with residency in certain jurisdictions can be highly advantageous. Income and capital gains tax is often spoken about amongst the British expat community, however, the tax that is often forgotten about, or at least not talked about anywhere near as regularly is that of inheritance taxation.

Inheritance tax can be a complicated subject for expats who often have circumstances that we see less commonly within UK residents, for example, it is reasonably common for UK Domiciled individuals to be married to non UK Domiciled individuals. Further, it is also reasonably common to come across British individuals who are no longer domiciled in the UK and are not even aware of it. If you are in either of these situations, or are simply not sure, then get in touch and get some advice.

UK IHT is paid by UK Domiciled individuals on their worldwide estate when they die (subject to certain double taxation treaties) and is usually paid on UK assets only if you are not domiciled in the UK. The issue of domicile is a complex one which is often confused with residency – the two things are not the same!

If you are unsure of your domicile, or believe there is a chance you may not be UK domiciled (ie you weren’t born in the UK or your parents were not), then get in touch.

For a domiciled married couple, the bottom line up front is that, assuming you leave your main residence to your direct descendants, you can currently leave GBP 1m free of IHT (breakdown shown below). After that, there will be a tax of 40% on everything above the million. Further, if you have assets totalling more than GBP 2m it gets worse as one of the allowances starts to be lost. Definitely get in touch if you are starting to creep towards or have gone above the GBP 1m mark.

Now, let’s look at some of the most common ways to avoid inheritance tax

  • 1. Understand The Situation
  • 2. Understand Your Wealth
  • 3. Understand the reliefs available to you
  • 4. Understand the tools available to you

1. Understand The Situation.

  • Asset Location. It is important that you understand the taxation rules applied in the state where your assets are located. They may be different to the state that you originally come from so understanding who holds taxing rights over the asset is key.
  • Individual location. It is important that you understand whether your own residency or domicile impacts the taxation applied to your assets. It is also important to understand the same information for your spouse.

2. Understand Your Wealth.

An obvious point, but if you had not made it home last night, what would the financial situation have been this morning. A lot of people simply do not know the value of their estate if they were to decease which clearly needs to be rectified in order to tackle IHT.

A combination of points 1 and 2 will lead you to ascertain whether there is a problem that needs to be addressed.

3. Understand the reliefs available to you.

Lots of countries have reliefs available regarding IHT, it is generally not 100% of the estate which is taxed. Understanding these reliefs is going to allow the individual to understand how they can organically reduce IHT.

4. Understand the tools available to you in order to further reduce IHT.

It is normal to have options concerning further reductions in IHT. Some examples of these could be:

a. Making a Will
b. Keeping below relief thresholds
c. Gifting assets
d. Use of trusts
e. Life insurance
f. Gifts that fall under the relief rules
g. Spending money
h. Leaving money to charity

Summary

Generally, a combination of these things are going to be the best solution but we would have to go through individual situations in order to determine the best course of action for you specifically.

21st October 2022/by Adrian
Tags: tax
Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on Linkedin
  • Share on Tumblr
  • Share on Reddit
  • Share by Mail
https://www.adrian-cartwright.com/wp-content/uploads/2022/10/inheritance-tax.jpg 563 1000 Adrian https://www.adrian-cartwright.com/wp-content/uploads/2019/10/adrian-cartwright.png Adrian2022-10-21 06:50:382022-10-21 10:23:50Inheritance Tax - The Forgotten Tax

Follow Adrian Cartwright

Recent Articles

  • 5 Key things To Review At The Beginning Of 2023
  • The Onus Is On You!
  • 2022 Market Turmoil
  • Inheritance Tax – The Forgotten Tax
  • 12 BEST Savings Accounts in Dubai, UAE Compared

Popular Articles

  • The OPTION to become a millionaireThe OPTION To Make Millions11th February 2021 - 5:52 pm
  • DIY Investing VS Using AdvisorDIY Investing vs Using An Advisor [HOT TOPIC]28th January 2021 - 3:36 pm
  • who made most money in 2020Top 5 Billionaires Who Made The Most In 2020 And How They Did It21st January 2021 - 7:36 pm
  • 6 ways to save half a million in savingsHow To Make £500k Through Comfortable Saving7th January 2021 - 4:29 pm

Financial Services

  • Pension Transfer Advice
  • Trust & Estate Planning
  • Portfolio Design
  • Retirement Planning
  • UK National Insurance
  • Property Investment
  • Life Insurance
  • Education Planning
  • Foreign Exchange
  • Mortgages

Financia Instruments

  • Mutual Funds
  • ETFs
  • Bonds
  • Fixed Income
Link to: Get in touch

Any more questions? Feel free to get in touch!

We all know that dealing with financial consultants in Dubai can seem extremely daunting at first, but with the right advice and structure put in place, you can save for future.

Adrian Cartwright ACSI | Financial Consultant Dubai | Dubai Marina
WhatsApp: +971 52 855 7084
CISI Membership Number: 182193 | CII-Ref: M/505/1318

Located in Dubai, Adrian Cartwright FNCSA, represents clients throughout the United Arab Emirates, including, but not limited to the cities of Dubai, Abu Dhabi, Sharjah, Ras Al Khaimah, Fujarah, Um Al Quain, Ajman.

DISCLAIMER

The information contained in this website is for general information purposes only. The information is provided by Adrian Cartwright and while he endeavours to keep the information up to date and correct, he makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.

© 2022 Adrian Cartwright – Financial Advisor Dubai

Web Design Dubai by Search Shack | Privacy Policy

Scroll to top

This is a notification that can be used for cookie consent or other important news.

OKLearn More

Cookie and Privacy Settings

How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, you cannot refuse them without impacting how our site functions. You can block or delete them by changing your browser settings and force blocking all cookies on this website.

Google Analytics Cookies

These cookies collect information that is used either in aggregate form to help us understand how our website is being used or how effective our marketing campaigns are, or to help us customize our website and application for you in order to enhance your experience.

If you do not want that we track your visist to our site you can disable tracking in your browser here:

Other external services

We also use different external services like Google Webfonts, Google Maps and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Vimeo and Youtube video embeds:

Privacy Policy

You can read about our cookies and privacy settings in detail on our Privacy Policy Page.

Privacy Policy