Inheritance Tax - British/Australian Expat with no assets in UK,Australia or Thailand

[CrossBones]

Hi

I am British and Australian

I have no assets in UK, Australia or Thailand

 

My assets are in an offshore brokerage account, which I set up while I have been living in Thailand. I told the broker that I am a Thai tax resident.

 

I am on an Elite visa, I do not have permanent residence in Thailand.

 

I wrote a will, leaving money to family. Less than $3m which I understand is the threshold for inheritance tax.

 

What is the procedure when I die here? How is probate done? How do my family get the money? This shouldn't be taxable as inheritance tax in the UK or Australia as I own no property there and have no income or assets in those countries.

 

Thanks

[Mike Lister]

You don't say if you have a Thai will or not, it's sensible to have a different will for every jurisdiction in which you have assets. 

 

You say that your assets are located in an offshore brokerage, where exactly because that may make a difference to probate. Typically, a brokerage house will require you to specify who you want to leave your assets to, have you done this? 

 

Assuming yours is a UK or Australian will, I do not know how long probate will take in those countries but I have read that probate in the UK is running to over a year in some cases because of the lack of poorly trained staff.

 

 

[Foxx]

(1) The UK IHT nil rate band is £325,000 - far less than US$3 million.  It's a bit over $400,000 USD.

 

(2) If the brokerage is in the USA and you have invested in US instruments, there may be a US death tax liability.

 

(3) You will probably be regarded as UK domiciled, so your worldwide estate will be taxable under UK inheritance tax rules, and your estate will need to go through the UK probate process.  (UK domicile is extremely difficult to lose.  Note that domicile is not the same as residence for tax purposes.)

[Foxx]

1 hour ago, Mike Lister said:

I have read that probate in the UK is running to over a year in some cases because of the lack of poorly trained staff.

 

Went through probate last year.  It was granted in two months, though four months is more typical.  Delays are most commonly caused by the paperwork being completed incorrectly.  (There's a lot of it, and it's pretty complex.  I had to fill in sixteen different forms for a relatively simple estate.)  Submitting through a solicitor should avoid such problems.

[Mike Lister]

2 minutes ago, Foxx said:

 

Went through probate last year.  It was granted in two months, though four months is more typical.  Delays are most commonly caused by the paperwork being completed incorrectly.  (There's a lot of it, and it's pretty complex.  I had to fill in sixteen different forms for a relatively simple estate.)  Submitting through a solicitor should avoid such problems.

"The waiting time for probate almost doubled from April 2022 to April 2023, with reports citing cases of probate taking more than eleven months and practitioners advising clients that probate will take at least nine months".

 

https://committees.parliament.uk/committee/102/justice-committee/news/198600/justice-committee-launches-new-inquiry-into-probate-amid-concerns-over-delays-and-consumer-protection/

[Everyman]

You say your account is “offshore.” But that is a country somewhere, right? So when you die your assets will be distributed according to the laws of that country…right? Sounds you like you need a lawyer and a will…there. 

[Mike Lister]

26 minutes ago, Everyman said:

You say your account is “offshore.” But that is a country somewhere, right? So when you die your assets will be distributed according to the laws of that country…right? Sounds you like you need a lawyer and a will…there. 

That was in my mind also, I think "maybe" the declaration he signed with the broker "may" cover that aspect but TBH I don't know for sure. One think is certain however, he should!

 

[Foxx]

1 hour ago, Mike Lister said:

The waiting time for probate almost doubled from April 2022 to April 2023, with reports citing cases of probate taking more than eleven months

 

(1) That is old news.  Since then they've hired and trained more staff.

 

(2) Of course some cases take more than eleven months, because people don't fill in the forms correctly.

To quote from the official website:
 

Quote

You’ll usually get the grant of probate or letters of administration within 16 weeks of submitting your application. It can take longer if you need to provide additional information.

https://www.gov.uk/applying-for-probate/after-youve-applied#:~:text=You'll usually get the,arrive than your UK copy.

 

As I said, it took me only 2 months, and that was in May last year.

[vinny41]

25 minutes ago, Foxx said:

 

(1) That is old news.  Since then they've hired and trained more staff.

 

(2) Of course some cases take more than eleven months, because people don't fill in the forms correctly.

To quote from the official website:
 

 

As I said, it took me only 2 months, and that was in May last year.

I know someone that sent their documents to the probate office in January 2023 and received their probate certificate in November 2023 and all documents were correctly filled in 

The official Gov website doesn't show when it was last updated it was showing 16 weeks timeline back in 2016

when asked probate office advised delay was down to substantial increase in the number of deaths during Covid, and lockdowns, people working from home and the increased backlog due to Covid

[topt]

2 hours ago, Foxx said:

(UK domicile is extremely difficult to lose.

This could be his issue however I have no idea how it works if dual nationality which is what he seems to be saying -

12 hours ago, CrossBones said:

I am British and Australian

 

[Liverpool Lou]

4 hours ago, Mike Lister said:

Assuming yours is a UK or Australian will, I do not know how long probate will take in those countries but I have read that probate in the UK is running to over a year in some cases because of the lack of poorly trained staff.

They better recruit some more "poorly trained staff" if there's a shortage!

[noobexpat]

14 minutes ago, topt said:

This could be his issue however I have no idea how it works if dual nationality which is what he seems to be saying -

 

 

Domicility begins in the country of birth. 

[noobexpat]

2 hours ago, Mike Lister said:

That was in my mind also, I think "maybe" the declaration he signed with the broker "may" cover that aspect but TBH I don't know for sure. One think is certain however, he should!

 

 

In the UK, usually its only pension fund wrappers that offer an 'expression of wish' form. 

 

Never seen any other succession forms for non-pension.

[wordchild]

19 hours ago, noobexpat said:

 

Domicility begins in the country of birth. 

Under UK law, it is the domicile of your father on the day of your birth. That is your domicile of origin, it is possible to claim a different domicile after many years outside the UK.

 

As others have said the key point is where are your assets held? That is where probate will be needed and you should have your main will in that jurisdiction. eg if your accounts are in Singapore then your executors will need to apply for probate in Singapore, no need for a Thai probate application to cover those assets. You should also have a separate will, in Thailand,  to cover your assets here, a Thai probate will be needed to cover those (Thai)  assets.

 

If there are no UK assets then there is no need for a UK probate. If you have been resident outside the UK for many years , and with no UK based assets, the Singapore courts should see no reason to involve the UK. Certainly that is the advice i have had from my own lawyers in Sing.

(As for Australia i am not sure what the situation is and you should get legal advice on this when drawing up your (Singapore or other) will.)

It may also be a good idea to attach to your wills a letter stating your residence and where you consider to be your permanent home.

 

Inheritance tax obligation, on your estate,  firstly  depends on where the assets were held at the time of your death. eg in Singapore there is no inheritance tax. From what you have said about your situation, it is the inheritance law of the country where your assets are held that takes precedence . As long as you are not UK domiciled the UK could only make any claim for inheritance tax against the value of UK "situs" assets held by your estate; this would include eg UK property but also the shares or bonds of UK based companies even if they are held in an overseas broking account.

 If your beneficiaries are Thai residents there maybe a risk (depending on the circumstances)  of Thai inheritance tax being levied. Again , its best to get (Thai and other countries)  legal advice on this issue when drafting the wills. The advice i have had, in the past, is that there should be no Thai inheritance tax liability so long as the assets continue to be held outside Thailand by your beneficiaries. However, as we all know, the taxation rules are somewhat fluid here,  and it would be best to get up to date advice on this. 

 

Depending on your family situation, it might be worth considering having your accounts in joint names. eg if your (eg Singapore)  account is held jointly by you and your wife then it is possible that the assets would be transferred to her sole name on your death, by the bank,  without the need for any probate. However this depends on the internal policies of the bank and the nature of the account.

As i understand it, most Singapore banks (and banks in certain other countries)  currently apply the principal of "survivorship" on the death of one of the joint account holders. You should certainly check with your non-Thai bank what their policies are before you set up any joint accounts.

Edited January 26 by wordchild

[noobexpat]

2 hours ago, wordchild said:

Under UK law, it is the domicile of your father on the day of your birth. 

 

Yes, good correction!