Non-resident non-domiciliaries—inheritance tax implications of owning assets in the UK
Produced in partnership with Laura Poots and Emma Pearce of Pump Court Tax Chambers
Non-resident non-domiciliaries—inheritance tax implications of owning assets in the UK

The following Private Client guidance note Produced in partnership with Laura Poots and Emma Pearce of Pump Court Tax Chambers provides comprehensive and up to date legal information covering:

  • Non-resident non-domiciliaries—inheritance tax implications of owning assets in the UK
  • Application of Practice Note
  • Why inheritance tax?
  • Double tax treaties
  • Inheritance tax mitigation options
  • Debts
  • Using foreign companies
  • Anti-avoidance provisions—potential problems to watch
  • Lifetime gifts

Generally, where an overseas client owns an asset in the UK, their primary concern will be UK inheritance tax (IHT). For UK residential property, capital gains tax must now also be considered. See Practice Notes: Introductory guide to UK tax for non-resident individuals, Non-resident Capital gains tax—summary and UK home ownership structures for non-UK domiciliaries—outline.

The income tax and capital gains tax (CGT) implications of direct ownership of an asset by a person who is neither domiciled nor resident in the UK are dealt with in the Practice Note: Non-resident non-domiciliaries—income tax and capital gains tax issues.

Application of Practice Note

The IHT guidance in this Note applies to individuals who are neither UK domiciled nor UK deemed domiciled for IHT purposes.

A person becomes deemed domicile by virtue of long-term residence in the UK and it will take some time to lose that UK deemed domicile even after leaving the UK. So this concept can be relevant for clients who are not currently resident in the UK.

The rules on deemed domicile changed on 6 April 2017. Reference should be made to the Practice Notes on Domicile, Deemed domicile for tax before 6 April 2017 and Deemed domicile for tax from 6 April 2017 for the general concepts.

Why inheritance tax?

As explained in the Practice Note: IHT—the charge on death,