Inheritance Tax


Inheritance Tax

Carefully planning the financial affairs of your estate is essential to ensure that you can pass on the maximum benefit to your beneficiaries. There are mandatory taxes such as Income tax and there are "voluntary taxes" such as Inheritance Tax. Inheritance tax is voluntary because a person can make efforts to minimise such tax liabilities.

Many expats believe that moving abroad to another country will exempt them of any liability UK Inheritance taxation for their estate. This is not the case in the majority of situations, as UK Inheritance tax law is levied on worldwide assets.

In addition, moving abroad presents other complications to negotiate. For example, the Portuguese abolished Inheritance tax in 2004 resulting in assets being inherited with no tax liability. However, their laws can present other problems. UK tax law is based upon "common law" whereas the Portuguese adopt "Law of Succession". "Law of Succession" will be distribute estate assets based upon "forced heir-ship". In addition to this further layer of complexity, the estate could still be subject to Inheritance tax in the UK.

With advice and careful planning, these complexities can be offset, and liabilities can be mitigated.