DOMICILE, IHT and burial


E

Edward Lionheart

Doug Ramage said:
Not so. Domicile rulings can be necessary where the remittance basis applies
in respect of IT and CGT - including foreign emoluments for Schedule E.
I did say "virtually" impossible. One way is to settle an amount greater
than the IHT nil-rate band in an offshore trust and ask for a domicile
ruling. Are there any other less-drastic ways?
 
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J

john boyle

Marshall Rice said:
I've never heard of the Inland Revenue taking the place of burial into
account when deciding issues of domicile. That isn't to say that it
doesn't happen, but if it does, I'd be surprised if it's ever a major
factor.
Funnily enough, before I read this, at a seminar today the speaker
referred to this very point and stated that an otherwise non-domiciled
testator who had asked to be buried in UK had NOT severed all ties with
UK and therefore was domiciled in UK. I wish I'd got the reference
now.....
 
J

John Smith

john boyle said:
Funnily enough, before I read this, at a seminar today the speaker
referred to this very point and stated that an otherwise non-domiciled
testator who had asked to be buried in UK had NOT severed all ties with
UK and therefore was domiciled in UK. I wish I'd got the reference
now.....
Does this mean that the Revenue might ask to see a copy of your
current Will?

Obviously for IHT purposes they will wait for you to die first :)
 
J

john boyle

John Smith said:
Does this mean that the Revenue might ask to see a copy of your
current Will?
Yes, they see every will which is proven in probate.
Obviously for IHT purposes they will wait for you to die first :)
Hopefully!! Although IHT is chargeable on some lifetime gifts.
 
J

John Smith

john boyle said:
Yes, they see every will which is proven in probate.
But you've got to die first for that!
Hopefully!! Although IHT is chargeable on some lifetime gifts.
Would you give an example? I thought you had to die for IHT.
 
J

john boyle

John Smith said:
But you've got to die first for that!
Of course!! (Sorry about that!)
Would you give an example? I thought you had to die for IHT.
A settlement to a discretionary trust attracts IHT at the lifetime rate
which is currently half the full rate. Thereafter there is a periodic
charge to IHT every 10 years and also a charge on certain other
transactions carried out by the trustees.
 
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J

John Smith

john boyle said:
Of course!! (Sorry about that!)
We must be talking cross-purposes. I was asking if there are
circumstances where the Revenue might want to see the Will of a LIVING
person.

"Obviously" one can change a Will at any time (before one's death,
generally :). But there are situations where this can be prevented; if
you agree in a contract to make certain provisions in your Will then
these can be enforced after your death by the party relying on those
provisions having been made. I discussed some case law on this with a
solicitor recently. You can agree to make a provision in a Will as
part of a divorce settlement and this can be enforced even if you
changed the Will later. Not a lot of people know this...
A settlement to a discretionary trust attracts IHT at the lifetime rate
which is currently half the full rate. Thereafter there is a periodic
charge to IHT every 10 years and also a charge on certain other
transactions carried out by the trustees.
Presumably it would make sense to make such settlements over time,
each one being below the IHT threshold? Or is one allowed only one
contribution per lifetime for IHT purposes?
 
R

Ronald Raygun

John said:
We must be talking cross-purposes. I was asking if there are
circumstances where the Revenue might want to see the Will of a LIVING
person.

"Obviously" one can change a Will at any time (before one's death,
generally :). But there are situations where this can be prevented; if
you agree in a contract to make certain provisions in your Will then
these can be enforced after your death by the party relying on those
provisions having been made.
Well, since a will can always be changed, then even if the changes are
in breach of the kind of agreement you mention, and the changed will
would be successfully challenged in due course, there's nothing to
prevent the Revenue being shown the changed version which will turn
out to be invalid.
I discussed some case law on this with a
solicitor recently. You can agree to make a provision in a Will as
part of a divorce settlement and this can be enforced even if you
changed the Will later. Not a lot of people know this...
I wouldn't be so sure this is actually true, except incidentally,
that is to say you can enter into a binding agreement to make
certain payments, and they then become general debts (which somehow
stay acknowledged so they don't expire after 6 years) which the
creditor allows you to defer until you die.

I don't see why it would be better to bind yourself to leave some asset
in your will than instead simply to transfer the asset while still
alive, but with reservation of beneficial interest until you die. In
other words, it just becomes an ordinary debt. Debts have priority
over your will-able estate anyway.

Some jurisdictions have the concept of inheritance contracts, but I
thought they were utterly foreign to UK law.
 
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J

john boyle

John Smith said:
We must be talking cross-purposes. I was asking if there are
circumstances where the Revenue might want to see the Will of a LIVING
person.

"Obviously" one can change a Will at any time (before one's death,
generally :).
And it can be changed afterwards.
But there are situations where this can be prevented; if
you agree in a contract to make certain provisions in your Will then
these can be enforced after your death by the party relying on those
provisions having been made. I discussed some case law on this with a
solicitor recently. You can agree to make a provision in a Will as
part of a divorce settlement and this can be enforced even if you
changed the Will later. Not a lot of people know this...
Thats right, thats because the contract is a 'liability' , for want of a
better word of the estate which must be settled.
Presumably it would make sense to make such settlements over time,
each one being below the IHT threshold? Or is one allowed only one
contribution per lifetime for IHT purposes?
Its not the number but the cumulative value.
 

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