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Where’s home?
Key points
- An individual’s domicile will determine the liability of their estate to inheritance tax.
- From a UK perspective there are three ways for a deceased’s domicile to be determined: domicile of origin domicile of dependency and domicile of choice.
- Residence is an important consideration and questions of residence need to be answered using the statutory residence test and will depend on the facts of each case.
- Foreign elements in any estate may complicate matters and discussions may arise about which country’s tax has a ‘better claim’ to the deceased’s estate.
- If a double taxation agreement with provision for IHT does not exist advisors need to consider how to reconcile the UK’s deemed domicile rules with the foreign tax rules.
- The time and costs in investigating domicile can mount up and must be balanced against the value of the estate and the tax at stake.
How is the correct tax...
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