Wills And Westerners

[pkrv]

The question is: Are you UK-tax-liable? If you were not, and your instruction was for the executor to pick up money from offshore and distribute it to a person living in UK, I do not believe that inheritance tax would enter into it.

I'm not domiciled in the UK or liable to tax there. I just want to open some accounts there and have them covered by a UK Will rather than a Thai Will or no Will at all. Apparently, UK inheritance tax only kicks in when the amount is over 300,000 pounds, so I guess that makes it irrelevant to me. I'm on a Thai salary.

If you're not 'domiciled' (for tax purposes) in the UK, then any assets you have there or anywhere should be in the clear for inheritance taqx purposes, and the £300,000 threshold for inheritance tax is irrelevant. However, do take professional advice on your case. You can be totally free of UK income tax liability due to overseas residence and overseas source of income, but this does not by itself make you 'non-domiciled' for the purposes of inheritance tax on your world-wide assets..

The tax legalities of 'domicile' are a real minefield. It has nothing to do with simply not living there. Merely retaining and operating a bank account in the UK could compromise your claim to be 'non-domiciled' for tax purposes. Opening new accounts in the UK could also compromise 'non-domiciled' tax status - and it's very difficult in any case nowadays to open a new bank account in UK if you've severed all practical ties with the country (which is essentially what non-domiciled means) and if you cannot show current residency in the country or some other substantial current connection with the country. This is all due to anti-money laundering precautions.

Again I say, talk to an expert in English tax law. You should be able to identify some initial sources through the Web.

Filer - I flickered though your past posts, heavy duty stuff, thanks. The only thing I can add is from a different perspective. Unfortunately inheritance tax does not apply to the English Royal family, or the rich. Inheritance tax is now for the mediocre, esoteric mechanisms are in play to make this look OK (and real). Again to use the same word unfortunately this has an adverse impact on society.

[camerata]

If you're not 'domiciled' (for tax purposes) in the UK, then any assets you have there or anywhere should be in the clear for inheritance taqx purposes, and the £300,000 threshold for inheritance tax is irrelevant. However, do take professional advice on your case. You can be totally free of UK income tax liability due to overseas residence and overseas source of income, but this does not by itself make you 'non-domiciled' for the purposes of inheritance tax on your world-wide assets..

My earlier post was a bit misleading because in fact I am opening accounts in the Isle of Man, which apparently is not in the UK for tax purposes.

Anyway, thanks to GuestHouse's advice it turned out to be simple making a UK Will and only cost 100 quid plus VAT. The Will states that it revokes all other Wills except those made in Thailand and applies to all assets outside Thailand. There is a slight catch in that the Will would have to be probated in the Isle of Man and anywhere else I have assets. This is done by contacting a lawyer in the territory concerned and getting him to do the work. So there is some extra expense if assets are spread over multiple countries.

The lawyer told me if I neeeded to update or remake the Will it could be done via email and the final version mailed to me for signature, then mailed back.

All in all, I think it's worth letting a lawyer do it because they write it in such a way as to cover all contingencies, for example if certain beneficieries are dead or are still minors.

[samtam]

A couple of important things about Thai Wills, firstly they must be in the Thai Language and Secondly they must be formally registered.

Thanks for your very interesting and comprehensive post. When you state "they must be formally registered" where, (which department?), and is there some receipt to prove this? I effected a Will with my Thai lawyer in 2003, (to cover my condo and other assests inThailand) and I only have an English language version, and my lawyer is the executor, so I may have overlooked two keys points that you mention. (I would not doubt his integrity, but obviously what you have written has given me some cause for concern.)

[Loom]

If you hold substantial wealth in the UK/US then it makes sense to have a Will and an Executor looking after those UK/US assets.

Can a UK Will and Executor look after assets in offshore bank accounts in, say, Guernsey? Would those assets be subject to UK inheritance tax?

I think (but I may be wrong) is that if your executor attempts to repatriate the funds, the funds will be hit by inheritance tax. Perhaps the answer is to encourage enjoying life abroad

It is my understanding that a 'UK will' (by which presumably is meant a will set up in the English format and under English law), with a UK based executor, can govern assets held anywhere in the world. There may of course be additional local requirements which are advisable in order to facilitate the return or liquidation of assets held abroad - for example, having a local will in Thailand to cover any Thai assets and their distribution after death (without this a UK-based executor would have to do much more work to extract the Thai assets). I would imagine, however, that offshore banks in, say, Guernsey or other European jurisdictions would have no problem following instructions from a UK based-executor executing an English will.

I looked into the issue of having separate Thai and English language wills drawn up. The English language will would be done in Singapore. The lawyer advised me that this would create confusion about which document was meant to be the "last" will. His advice was to do an English language will only and have a Thai attorney make sure it complied with Thai law relating to the Thai assets. Maybe a Thai translation of the original English language will would be the way to go.

[cmsally]

Just a few things maybe to consider when you leave your assets behind for your Thai spouse and family. Don't forget that even if you leave money in a fairly "safe" set up such as a trust, your Thai spouse would have to probably be dealing with trustees/lawyers etc at some stage. If you are relying on a firm of lawyers as trustees this can set you back quite a bit on a yearly basis and all they will be doing is signing a few papers. Anything on top of that and they will be charging by the hour (not cheap). Maybe your spouse doesn't have great English skills, she'll need services of translator. You could be plunging her/him into a bureaucratic nightmare.

Not saying that I am for or against but whatever steps you take, think it through on a step by step basis and make sure the outcome would be what you wanted. Sometimes what you have planned on paper doesn't always bring the desired outcome in day to day life.

As far as Wills go I would be interested to find out how any Thai assets would be figured into inheritance tax. Would it be wise to mention Thai assets in a UK will? Personally I wouldn't but then I have a Thai spouse.