Poland and Polish Discussion Group and Forum

Welcome to the original English language Poland and Polish discussion group board. This message forum is a place where English-speaking Poles, foreigners (expats) living in Poland, and anyone with a genuine interest in Poland can discuss and read the views of others concerning Poland. Subjects include: Polish news and current affairs; Life in Poland; politics; genealogy research; Polish culture and history; advice and tips on visiting Poland; Polish property and investment issues. The aim of our group is to increase awareness of wonderful Poland using the English language and allow and foster the honest debate and exchange of opinions on anything vaguely related to Poland and Polish - positive, negative and/or neutral! To state the obvious: all opinions and views expressed on this site are solely those of their respective authors and are not necessarily those of anyone else! Messages consisting of ads will be deleted.

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Poland and Polish Discussion Group and Forum
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UK inheritance tax on Brits resident in Poland

Q:I am not resident in the UK for tax purposes and haven't been so for many years so surely I am not domiciled in the UK?

A: No, domicile and tax residency are 2 entirely different things. A person can be tax resident somewhere completely different to his place of domicile. The simplest explanation of domicile is that it is the place with which you have the closest connection and that will nearly always be your place of nationality or birth until concrete steps are taken to change that. If you are a British national born in the UK you will almost certainly still be domiciled there even if you haven't lived in the UK for many years.

Q: OK, so I may be liable to UK inheritance tax but if I die abroad after many years of living outside the UK then how will they know I have died and collect the tax?

A: Relying on the tax man not finding out is NOT good planning. If you have any assets whatsoever in the UK then it will be impossible to get those assets transferred without obtaining probate. Part of the probate process necessitates getting a clearance from the Capital Taxes Office so they will, of necessity, be given the opportunity to assess the tax due. If you have no assets or a will in the UK but have heirs who are resident in the UK then they may be questioned about how they came to receive the inheritance and that may trigger the investigation. If you die in a country which has a tax treaty with the UK that treaty will contain exchange of information clauses so the foreign tax authority may inform the UK about your death. If none of this applies then it is unlikely, but not impossible, that the UK will find out but why take the risk? You will be potentially liable unless you obtain a ruling that you are non UK domiciled. The cost of getting the ruling is small. The cost of doing nothing may be huge. This is insurance against a 40% tax bill.

Q:I have been told that if I have UK situated property or other assets I cannot be considered non UK domiciled?

A: Wrong. Having UK property or other assets does indicate that you have retained a connection with the UK but if sufficient evidence of connection to another country can be established it will outweigh any considerations about UK assets.

Q: So how do I establish that I am not domiciled in the UK?

A: You must establish a close connection with another place. The UK Revenue say that it is not possible to lose an UK domicile until that person has been out of the UK for 3 years. So, in theory, any stay of 3 years in another country could be sufficient to establish an alternative domicile but in practice we suggest that an application is not made until you have been in another country for a minimum period of 6/7 years and have made some real social and business commitments to that new place of residence. Legally there are really only 2 criteria necessary to establish that you have lost your UK domicile: (1) Can you honestly state that you have left the UK and have no current intention to return to live there on a permanent basis? (2) Have you established another permanent home and residence abroad?

Re: UK inheritance tax on Brits resident in Poland

Arent they planning to bring in a flat rate charge of £25k a year for anyone who declares themselves non domiciled? They recently had a huge amnesty operation to net all those residents with undeclared offshore income.

Re: UK inheritance tax on Brits resident in Poland

New non-dom legislation is designed to catch approximately 4% of the 100,000 using this tax haven ruse thought up to attract Russian kleptocrats to the UK.

Re: UK inheritance tax on Brits resident in Poland

What does this mean for me with regard to my folks popping their clogs and me being resident here for 14 years?

Re: UK inheritance tax on Brits resident in Poland

depends how much money they have but if over the new threshold then you pay IHT. Now they have changed it to a couples allowance I'm not quite sure of new rules.

Re: UK inheritance tax on Brits resident in Poland

UK residents dying in the UK and leaving estate in the UK to foreign-domiciled persons get hit by UK inheritance tax AND it was the case that they got hit by Polish inheritance tax (of 7%) as well if people were stupid enough to declare it.