ChiFRA

The UK government's record inheritance tax haul reveals how more British families are being captured, including expatriates, despite a rising home allowance. 

The last tax year has proven to be yet another record year for UK inheritance tax (IHT) receipts. HM Revenue & Customs (HMRC) announced it received an extra £200 million in 2018/19, generating a total of £5.4 billion. This burden was shared between 27,000 families, paying an average tax bill of £200,000 each.  

Usually, higher tax receipts can be explained through government measures to increase tax rates and widen the scope for liability. However, the 40% rate has been unchanged since IHT's inception in 1986, and an additional main home relief has been in place since April 2017.

In general, double tax treaties signed between countries are designed to determine the taxation rights of the different income and gains, when there is a conflict (i.e. when assets are located in one country and the individual is resident in another, or when someone is considered resident for tax purposes in two different countries due to each country’s domestic rules).  

UK nationals living in Spain need to understand how the Spain-UK double tax treaty works and affects them.  It is importantto know where your taxes are due.

Transfer values for UK final salary pensions may be high, but would you really benefit from giving up a lifetime retirement income for a one-off payment?

If you were offered £235,000 now or an inflation-proofed £10,000 a year for the rest of your life, what would you choose?