Moving your family overseas often comes with the need to plan for their long-term future and it’s essential to keep your financial affairs in solid, working order. It’s particularly important to think about how to guard them in the unfortunate case of death or injury.
Be mindful of the influence of local laws – especially when it comes to estate planning and wills. Advice taken locally is key to ensuring that your wishes are carried out when you die and it is often difficult to bypass your children when planning inheritance in comparison to the UK where civil laws operate.
As a basic example, the house that you and your family might have shared in Australia would be automatically passed on to any children and your surviving partner might still be able to use the house but would not be able to sell it without the children’s permission.
Many people find trust schemes a useful platform for estate planning in that they allow a parent to ensure their assets are only passed on to children at a certain age and when they are able to make financially independent decisions. However, UK trust law might not hold up in a civil law jurisdiction, which doesn’t recognise legal structures of this kind. Holding your wealth in an offshore location could also be a way of managing this issue and may help avoid any potential issues.
Some expats often find it difficult to manage their bank account abroad, particularly joint accounts, as in the unfortunate case of death; the survivor may not be able to access the funds.
When it comes to securing your Will – if of UK origin, it should be accepted almost everywhere in Europe. However, it can be a good idea to exclude your foreign property from the main Will and have a separate Will drafted up in local form for dealing with the property in that country. Without a Will, your home will not necessarily be passed on to your loved ones in the way you would hope.
It is also worth bearing in mind that inheritance laws vary worldwide and are often highly complex, but with proper planning it is possible to pass on a legacy to your family without incurring a crippling tax bill.
In many countries inheritance tax is charged on an estate when someone dies. The important thing for expats to remember is that inheritance tax is based on your domicile and/or your residency. If you are domiciled or deemed domicile in the UK, you could be liable for UK inheritance tax on all of your assets worldwide, even if you live in another country.
Claiming back tax before you leave the UK can be very advantageous, even though completing a tax refund application can be a daunting task for anyone. However, PSS International Removals can happily refer you to one of our tax-back agents who will prepare and submit a claim on your behalf.
This will ensure that all of the information and evidence is provided correctly to the HMRC who can also review tax payments dating back 6 years and claim back any over payments at the same period. Furthermore, our tax-back agent is based in the UK and can offer a free, no obligation initial consultation. Please click this link to complete a form for more information or for our partner to contact you.