Inheritance Tax

gypsylil

Hi, I wonder if anyone can help me on this .
We have a house in Malta and we have done a will in Malta as well as a will over here.

In the event of our death does the house in Malta get added with what ever we have over here, or does it not . Thank you

NABC_LLP

If you a UK domiciled you are subject to UK IHT on your world-wide assets. If you are non-UK domiciled, you are only subject to UK IHT on the assets in the UK.

pjcox2005

Just to add clarity to the statement above, the definition of domicile as taken from HMRC’s website is as follows:

‘Domicile is a general law concept; it refers to the country which is your ‘permanent home’. There are a range of factors that can affect where you are domiciled at any point in your life.

Your domicile status is usually acquired from your father, although you can change it when you become an adult. So if both you and your father were born in the UK, have lived in the UK for all or most of your lives, and do not have strong connections outside the UK then you will be domiciled within the UK. ‘

If the above is not the case for you, then I would suggest you go to the HMRC website to see if there is any guidance (I’m sure there will be) as to how to determine your domicile status and whether a form needs to be completed in order for the status to be approved.

Once you’ve established this then NABC LLP’s comments come into play.

Hope that helps.

gypsylil

Thank you both for your help, and yes I will go on to HMRC website.

egrid1

Domicile falls under three main headings for Inheritance tax.

1. Domicile of origin
2. Domicile of choice
3. Deemed domiciled

Domicile of origin is as stated in the quote from pjcox2005.

Domicile of choice is an adopted domicile when you leave a country, with the intention of leaving for good, and over time you adopt a new domicile. Generally though you would need to have broken all links with your original domicile, and made a life in the new domicile. So perhaps own property (your main home), have bank accounts, a job etc in the new domicile, as well as having an intention to be buried there.

Deemed Domiciled is where you have spent 17 of the last 20 years living in the UK.

The UK does not have double taxation agreements with Malts for Inheritance tax, however, if it was the case that your estate in Malta was subject to inheritance tax there, and you are UK domiciled, so liable for inheritance tax here as well, then your estate may be able to benefit from unilateral relief. See hmrc.gov.uk/cto/customerguide/page20.htm#12