If you are originally from India and you eventually plan to return to live there, you may be able to avoid paying UK inheritance tax on your Indian assets.
Broadly speaking, if you were born abroad and have moved to live in the UK, for the first 15 years that you are UK resident, you are usually only liable to UK inheritance tax on your UK-based assets. At the beginning of your 16th year of UK residence, you would then become what is known as “deemed domiciled” in the UK for inheritance tax purposes. This means that you are then liable to UK inheritance tax on your worldwide assets, subject to the provisions of any relevant double tax treaty. There are numerous teams of London lawyers whose work is devoted to advising wealthy non-UK domiciliaries or “non-doms” on how best to keep their foreign assets outside the UK inheritance tax net.
If you are from India and still have substantial assets there, you may nonetheless be able to avoid paying inheritance tax on your Indian assets. The rules are governed by a piece of legislation called “The Double Taxation Relief (Estate Duty) (India) Order 1956”. However long you have lived in the UK, if you are still viewed as being domiciled in India on death, your Indian assets will be outside the UK inheritance tax net. This is unusual and very privileged tax treatment.
In this scenario, it is usually considered good practice to make a separate Will in India to deal with your Indian assets, as part of building up the picture of your continued Indian domicile. It may also be advisable to obtain an opinion from a local lawyer in India to confirm that you would be regarded as domiciled in India, as a matter of local law.
Chiltern Wills is a Will writing business based in Beaconsfield and run by former London solicitor, Rebecca D’Arcy. Call us on 01494 708688 or email firstname.lastname@example.org to discuss making your Will or Lasting Powers of Attorney.