More families than ever caught in UK inheritance tax net

applies to their worldwide estate, regardless of residence. Non-UK domiciles are assessed on UK situated assets.

Your liability is calculated on your entire estate – property, savings and investments, insurance policies not in trust, household contents, jewellery, vehicles etc. Outstanding mortgages and loans are generally deducted from the total.

By Brett Hanson, Senior Partner,

eliminates the RNRB entirely when an estate exceeds £2.35 million. The current £175,000 allowance is also frozen until 2028.

Is your estate liable for UK inheritance tax?

UK IHT is charged on death and

If the total value of your estate is lower than the two allowances, your heirs do not have to pay this tax. If it exceeds the thresholds, your heirs pay 40% tax on the excess. Where the allowances are not used on the first death, or only partly used, the balance can be transferred to the surviving spouse/civil partner – make sure your estate is set up to take full advantage.

Expatriates and the domicile issue

UK inheritance tax follows you around the world since your estate is liable for as long as you remain a UK domicile. Domicile is a complex and adhesive UK common law concept, and many British expatriates are UK domiciled their whole life.

That said, you can take steps and cut ties with the UK to adopt a domicile of choice in Spain, though it can take up to four years to shed a UK domicile for inheritance tax purposes. Getting your domicile status wrong could result in an unexpected large tax bill for your family, so professional advice is essential here.

UK inheritance tax planning

Inheritance tax is often referred to as a voluntary tax, since there are various steps you can take to eliminate or and heirs. Don’t risk leaving it too late, especially if you are planning on making lifetime gifts (‘potentially exempt transfers’).

Cross-border estate planning can be a minefield – more so if you are subject to inheritance taxes in more than one country as is the case with British expatriates in Spain – so take specialist advice today to get it right and take advantage of the planning opportunities available.

The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

Keep up to date on the financial issues that may affect you on the Blevins Franks news page at

THE Alicante provincial government has set aside a budget of more than €19.5 million to help vulnerable families with the ever-increasing cost of living. The subsidies are aimed at helping crisis-hit families pay for basic needs such as food, cleaning and hygiene products and medicines, school materials and the