Question
I am not a UK resident for tax purpose. I used to be a student in the UK from 1979 to 1984. I then worked in Brunei for many years and retired from govt job and now live in India. I visit my children who live and work in the UK about two months every year. I have investements in the UK and Jersey(CI) and do trading on the London market. I also have investments in India and pay taxes on the income earned in India.
What I would like to know is about my Inheritance Tax Positon. Answer
If you live overseas then the key to determining your UK inheritance tax position is your 'domicile'.
In general you inherit your domicile from your father, being the country where he was a permanent resident. But once you're over age 16 you can change your country of domicile by living there permanently. The important points here are that it must be a permanent move and you can only have one domicile at any point in time.
So if your move to India is permanent and you have no intention of moving to either the UK or elsewhere in future then your domicile should be regarded as India.
I don't think this will apply to you - but even you are domiciled in India, HMRC could treat you as being 'deemed domicile' in the UK if you were domiciled in the UK within three years of transferring assets/dying or you were tax resident in the UK for at least 17 of the last 20 tax years before transferring assets/dying (provided your visits to the UK average no more than 91 days a year then you should remain non-resident).
Assuming you are domiciled in India then only your assets held in the UK will be subject to UK inheritance tax (if you're domiciled in the UK the tax will apply to your worldwide assets).
Assets will be deemed to be held in the UK if they're physically held or registered here, so this includes UK bank accounts and shares registered in the UK. But note, certain gilts (called FORTA - free of tax to residents abroad) and authorised unit trusts are usually treated by HMRC as being exempt from inheritance tax if you're a non-domicile.
As far as I'm aware India does not levy inheritance tax, so your main concern will be the UK based assets. There is some good news as HMRC gives an inheritance tax exemption (called 'nil rate band'), currently £325,000, regardless of your domicile, so assets below this exemption will not be subject to UK inheritance tax.
I am not a UK resident for tax purpose. I used to be a student in the UK from 1979 to 1984. I then worked in Brunei for many years and retired from govt job and now live in India. I visit my children who live and work in the UK about two months every year. I have investements in the UK and Jersey(CI) and do trading on the London market. I also have investments in India and pay taxes on the income earned in India.
What I would like to know is about my Inheritance Tax Positon. Answer
If you live overseas then the key to determining your UK inheritance tax position is your 'domicile'.
In general you inherit your domicile from your father, being the country where he was a permanent resident. But once you're over age 16 you can change your country of domicile by living there permanently. The important points here are that it must be a permanent move and you can only have one domicile at any point in time.
So if your move to India is permanent and you have no intention of moving to either the UK or elsewhere in future then your domicile should be regarded as India.
I don't think this will apply to you - but even you are domiciled in India, HMRC could treat you as being 'deemed domicile' in the UK if you were domiciled in the UK within three years of transferring assets/dying or you were tax resident in the UK for at least 17 of the last 20 tax years before transferring assets/dying (provided your visits to the UK average no more than 91 days a year then you should remain non-resident).
Assuming you are domiciled in India then only your assets held in the UK will be subject to UK inheritance tax (if you're domiciled in the UK the tax will apply to your worldwide assets).
Assets will be deemed to be held in the UK if they're physically held or registered here, so this includes UK bank accounts and shares registered in the UK. But note, certain gilts (called FORTA - free of tax to residents abroad) and authorised unit trusts are usually treated by HMRC as being exempt from inheritance tax if you're a non-domicile.
As far as I'm aware India does not levy inheritance tax, so your main concern will be the UK based assets. There is some good news as HMRC gives an inheritance tax exemption (called 'nil rate band'), currently £325,000, regardless of your domicile, so assets below this exemption will not be subject to UK inheritance tax.
Read this Q and A at http://www.candidmoney.com/questions/question296.aspx
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