Uk Budget For Those With Thai Spouses

[fletchsmile]

Only a consultation process at this stage, but this is a welcome development for UK nationals with Thai spouses...

"The Government will commence a consultation process on increasing the Inheritance Tax (IHT) exempt amount that an individual can transfer during lifetime or on death to their spouse or civil partner, where their spouse or civil partner is not UK domiciled for IHT purposes. The exempt amount currently stands at £55,000. It is proposed that this limit will be increased to the level of the prevailing nil rate band (£325,000 2012/13) for non-domiciled spouses and civil partners..."

carried on at the link below:

http://www.ukbudget.com/UKBudget2012/individuals/UKBudget2012-individuals-inheritance-tax-spouses-and-civil-partners-domiciled-outside-the-uk.cfm

As someone living in Thailand, married to a Thai and having children, inheritance tax (IHT) is one of the most annoying UK taxes.

I can accept arguments that I am no longer resident in the UK so not entitled to many things under the UK Welfare system, even tho I paid into it for many years. So if I die tomorrow, the wife and kids have no entitlement to UK benefits such as Income support, Child Benefit etc. OK fair enough I can accept that.

It adds insult to injury though that the UK government wants to dip its sticky fingers into anything I leave behind for my wife and children to live on, when I've very little to do with the UK, and much of that money never had anything to do with the UK in the first place, and was earned here. Even worse that they will try and take more money off my family just because my wife is Thai/ foreign than if she were British. Thailand has virtually nothing in the way of looking after my wife and kids, and the UK gives them nothing, nor would it do so, hence if I die here every penny/ baht counts for them, and I see no reason why the UK gets 40% of amounts above their threshold, and gives my surviving family nothing in return, so their quality of life suffers thru no fault of their own.

Bad enough that most people don't have a choice about being UK domiciled or not. You're born with it and stuck with it. Harsh indeed though to penalise someone's family through no fault of their own? So a welcome development.

[Questador]

You can become non UK domiciled for IHT. It is, however, more difficult than becoming non-resident for tax. A web search will reveal plenty of information.

Posted with Thaivisa App http://apps.thaivisa.com

[theblether]

Interesting post and looks to me that it's only fair to give the same inheritance tax band to a non domiciled spouse. The sooner they do away with inheritance tax altogether the better. It's am issue that haunts many people in their old age.

Without going too far into it, my parents are wealthy, and they are paying a substantial insurance premium every month to mollify the effects of inheritance tax. To me it's absurd.

Part of the absurdity is the way that the inheritance tax is paid, I would ( with my sisters ) have 30 days to pay the sum due. So my parents worry that they would be putting stress on us by having us find that amount of money quickly, so they pay insurance at a ridiculous rate to help us out???

If you have elderly parents, they worry about everything and they don't want to be a burden. If you are in your older years you probably recognize that feeling, it's an unfair burden to carry in your retirement years. ( I am aware about the 7 year rule etc, but some unscrupulous people have been known to abuse their parents in the past ).

On top of that, many English people in particular have found themselves drawn into the inheritance tax issue through the increase in their family home value. You can't buy much in London these days for £325,000, and some people are sitting in family homes bought in the 40's which are now worth vastly more than that figure.

To me, your domestic property, family home, should be removed from the equation altogether. However it looks like something is being done about the situation you are in so very good.

Edited March 22, 2012 by theblether

[cardholder]

As someone living in Thailand, married to a Thai and having children, inheritance tax (IHT) is one of the most annoying UK taxes.

I can accept arguments that I am no longer resident in the UK so not entitled to many things under the UK Welfare system, even tho I paid into it for many years. So if I die tomorrow, the wife and kids have no entitlement to UK benefits such as Income support, Child Benefit etc. OK fair enough I can accept that.

fletchsmile - not sure this is correct. If you have paid NICs then your death could bring a number of benefits (depending on the ages of the children)

[SlyAnimal]

Inheritance tax.... man that sucks....glad we don't have that in NZ

I'm probably going to repeat something which everyone first says upon hearing about your situation but.....

Wouldn't people just get around an inheritance tax by placing all of their assets into a family trust which would then indefinitely look after the assets on behalf of the future generations? (Or is there a tax around that too?)

Likewise, if your family is in Thailand, and your assets are in Thailand (Or if you could transfer your assets to Thailand), wouldn't they avoid any UK tax? (Assuming that you made your will in Thailand, thus everything would be handled under Thai law not UK law)

[letitbe]

I put most of our assets into my Thai wifes name including some left in USA and UK years ago mainly because of unfair IH tax. I would advise others to get their money out of UK as quickly as they can not only because of IH tax but it may not be long before UK catches up with other countries that levy a special tax for taking more than a nominal amount out of the UK. Weve been married fro 16+ years and I always say if you dont trust your wife dont marry rent instead but that does not solve IH tax issue.

[norrona]

I put most of our assets into my Thai wifes name including some left in USA and UK years ago mainly because of unfair IH tax. I would advise others to get their money out of UK as quickly as they can not only because of IH tax but it may not be long before UK catches up with other countries that levy a special tax for taking more than a nominal amount out of the UK. Weve been married fro 16+ years and I always say if you dont trust your wife dont marry rent instead but that does not solve IH tax issue.

I trust my wife....just don't trust myself

[PattayaParent]

I put most of our assets into my Thai wifes name including some left in USA and UK years ago mainly because of unfair IH tax. I would advise others to get their money out of UK as quickly as they can not only because of IH tax but it may not be long before UK catches up with other countries that levy a special tax for taking more than a nominal amount out of the UK. Weve been married fro 16+ years and I always say if you dont trust your wife dont marry rent instead but that does not solve IH tax issue.

It does because you will spend all your money on rent and have none left to leave!!!

OP that is very good news, I hope it gets implemented soon. They were also supposed to be looking at raising the IHT threshold amount because of the increase in property values but I think Clegg put the blocks on that?

Edited March 23, 2012 by PattayaParent

[PattayaParent]

Interesting post and looks to me that it's only fair to give the same inheritance tax band to a non domiciled spouse. The sooner they do away with inheritance tax altogether the better. It's am issue that haunts many people in their old age.

Without going too far into it, my parents are wealthy, and they are paying a substantial insurance premium every month to mollify the effects of inheritance tax. To me it's absurd.

Part of the absurdity is the way that the inheritance tax is paid, I would ( with my sisters ) have 30 days to pay the sum due. So my parents worry that they would be putting stress on us by having us find that amount of money quickly, so they pay insurance at a ridiculous rate to help us out???

If you have elderly parents, they worry about everything and they don't want to be a burden. If you are in your older years you probably recognize that feeling, it's an unfair burden to carry in your retirement years. ( I am aware about the 7 year rule etc, but some unscrupulous people have been known to abuse their parents in the past ).

On top of that, many English people in particular have found themselves drawn into the inheritance tax issue through the increase in their family home value. You can't buy much in London these days for £325,000, and some people are sitting in family homes bought in the 40's which are now worth vastly more than that figure.

To me, your domestic property, family home, should be removed from the equation altogether. However it looks like something is being done about the situation you are in so very good.

Especially if that family home is not even in UK as is my case.

[PattayaParent]

Inheritance tax.... man that sucks....glad we don't have that in NZ

I'm probably going to repeat something which everyone first says upon hearing about your situation but.....

Wouldn't people just get around an inheritance tax by placing all of their assets into a family trust which would then indefinitely look after the assets on behalf of the future generations? (Or is there a tax around that too?)

Likewise, if your family is in Thailand, and your assets are in Thailand (Or if you could transfer your assets to Thailand), wouldn't they avoid any UK tax? (Assuming that you made your will in Thailand, thus everything would be handled under Thai law not UK law)

Trusts are subject to a flat rate tax of 20%.

The IHT is levied on your worldwide assets.