Domicile of wife?

[deadbeat]

Hello There,

I recently remade my will in the UK and my lawyer has asked where my wife is domiciled as this will be the deciding factor whether on not she would have to pay inheritance tax on my estate in the event I predecease her. My wife is Thai and I assumed that she would take my domicile even though she has never lived in the UK. The lawyer is not certain about this and wants to get an opinion from a high priced brief in London, but his opinion, in the event, may not cut it with HMRC. Obviously I don't plan on checking out anytime soon but it would be good to know what the position is so that I could make other arrangements.

So, I'm sure there must be other guys out there in the same boat so any advice or information would be greatly appreciated.

Many thanks 

[Kwasaki]

Look up the meaning my domicile is Thailand but to say that you have to live here or be here most of the time.

[lopburi3]

As I read above your wife lives in Thailand?  So that would be her domicile regardless of your status - she would not be moving to the UK.  So perhaps you are asking about your legal domicile?

[ubonjoe]

I would assume that if she is not living in the UK she would not be liable for the inheritance taxes there.

[Kwasaki]

11 minutes ago, ubonjoe said:

I would assume that if she is not living in the UK she would not be liable for the inheritance taxes there.

That's my guess, l think OP should ask a lawyer. 

[rockingrobin]

1 hour ago, ubonjoe said:

I would assume that if she is not living in the UK she would not be liable for the inheritance taxes there.

It is my understanding that inheritance tax is paid by the deceased estate, therefore the beneficiaries domicile is irrelevant for this purpose.

However the beneficiaries domicile and relationship (spouse) can affect liabiltiy of the payment.

As suggested expert consutation is required

[rockingrobin]

This guide maybe of interest

 

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm11033

[al007]

There are some  incorrect  and misleading statements made in this thread

 

read my post No 77 in the thread below it may help a little

 

 

First of all there is tax residency and tax domicile very different things, I only refer to UK law

 

No one is liable for inheritance tax, it is the deceased estate that is liable, and tax clearance is require before probate can be granted and until granted assets frozen and can not be distributed ( the executors can sell and deal however) some IHT can become due before some assets are sold, like a house, it is not unknown for beneficiaries to have to fund the IHT before they receive their inheritance

 

Transfer in an estate to a wife are exempt  from IHT so long as she is domiciled, wife living in Thailand definitely not domiciled

 

Thai wife living in UK is tax resident, but could still be deemed to be non domiciled so the exemption might not be available

 

If the OP moves and become tax resident outside of the UK in say Thailand he is likely to retain his UK domicile, unless he does a list of very specific things and thus liable to IHT on his worldwide assets, including those in Thailand, if there is property in the UK then probate can not be granted until the IHT liability is agreed, any professional acting on your behalf who might not include say a Thai property risks becoming personally liable, BE VERY CAREFUL

 

There is a basic exemption of around £320,000 ish available to every estate, so if the estate of the OP is below this then not a problem

 

Any good UK lawyer should know the answers and not need to go to expensive brief to check

 

I Write as a retired Chartered Accountant

 

On higher value estates £750,000 and up proper planning and forethought can save a lot of tax, and proper advice from a well qualified Lawyer or Chartered Accountant is preferable, , In the UK tax generally falls under Chartered Accountants, in the US Lawyers play a bigger role, Financial Advisers are not properly qualified to give this specialist tax advice

Edited October 22, 2017 by al007

[4MyEgo]

21 hours ago, ubonjoe said:

I would assume that if she is not living in the UK she would not be liable for the inheritance taxes there.

Hmmm, could fall under the foreign residents tax, but then again, I don't know if the UK has such a stupid rule like in Australia, i.e. any income derived from Australia is taxed at around 1/3 up to 80k, then it goes up from there.

 

It might be an option to get her UK citizenship, depending on the hoopla hoops he might have to go through, that, and weigh up the costs of course.

[al007]

8 hours ago, 4MyEgo said:

 

It might be an option to get her UK citizenship, depending on the hoopla hoops he might have to go through, that, and weigh up the costs of course.

That does  not necessarily  bring domicile

 

Many rich foreigners some with UK permanent residency, have fought to keep their  non domicile status since it kept many  non resident assets outside the UK tax net legally, a lot of this has now been stopped and legislation changed

 

Domicile and tax residency discussions are only for the true experts as a retired Chartered Accountant I know my knowledge is limited, although I am better versed than many

[4MyEgo]

33 minutes ago, al007 said:

That does  not necessarily  bring domicile

 

Many rich foreigners some with UK permanent residency, have fought to keep their  non domicile status since it kept many  non resident assets outside the UK tax net legally, a lot of this has now been stopped and legislation changed

 

Domicile and tax residency discussions are only for the true experts as a retired Chartered Accountant I know my knowledge is limited, although I am better versed than many

I didn't think the octopus's tentacles reached as far as the UK, although I know that to be the case now, thanks.