Cross-border post-death planning
Produced in partnership with Richard Frimston of Russell-Cooke Solicitors
Cross-border post-death planning

The following Private Client guidance note Produced in partnership with Richard Frimston of Russell-Cooke Solicitors provides comprehensive and up to date legal information covering:

  • Cross-border post-death planning
  • UK IHT planning—summary
  • Loss relief claims
  • Disclaimers
  • Variations
  • Succession claims
  • Trust distributions
  • Domicile elections

This Practice Note summarises the issues that need to be considered when personal representatives wish to undertake planning to reduce or defer the UK inheritance tax liability of an estate with US or French elements. For information on UK-US and UK-France estate planning, see Practice Notes: UK-US estate planning—introduction and UK-France estate planning—introduction.

UK IHT planning—summary

In the UK, inheritance tax (IHT) on death may be reduced or deferred in a number of ways:

  1. changing the value for IHT purposes (loss relief claims)

  2. disclaiming so that the ultimate beneficiary who then becomes entitled is treated for tax purposes as having inherited direct from the deceased (disclaimers)

  3. varying the way in which the deceased's estate devolves and electing to treat such variation as having been made by the deceased for IHT purposes (variations)

  4. varying the beneficiary so as to produce different tax results (succession claims)

  5. distributing out of a discretionary Will trust (trust distributions)

This Practice Note also considers the possibility of making an election to be domiciled within the UK, which can be used for post-death planning.

In a cross-border context, variations are generally mere tax fictions and are very unlikely to be recognised in another jurisdiction.

Common law jurisdictions may have more scope for tax planning since assets usually vest in personal representatives rather than direct in beneficiaries. The USA and France