Posted by
Hecules
15 yrs ago
I want to give my children, who live in the UK, part of what will be their inheritence before I die. This is partly to avoid inheritence tax and partly so that they don't have to wait, perhaps years, until I die before they can enjoy some of the fruits of my labour. I believe there is a seven years rule, that is how long you need to live after giving a gift, cash or property, however, in tha case of cash how is the UK taxman able to assess what is a gift and what is a loan. Is there anyone in Hong Kong I can consult? I am not seeking free advice. Or is there information available on the web?
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teme
15 yrs ago
Hi, I do not know the answer to your question....however there WAS a seven year rule, but you need to check with the current government as to whether or not that still applies. I know about this as I was gifted an amount of money. The seven year rule did apply to the day, ie 6yrs and 353days and you still had to pay the tax. As far as I am aware you are allowed to give a certain amount without it being subjected to tax...friends of mine have recently given their children GBP5000 each. However if the amount you wish to gift is larger may i suggest you search the UK govt web site or try estate planning with one of the big finance players.....I would get 3 opinions as all these things change with new govts. good luck.
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There was a tax lawyer at Squire Saunders Dempsey (forgot his name) who specialises in this sort of stuff, otherwise I believe that Weir & associates have a man called David Gunson, for whom I believe UK Tax is his bag.
Alternatively speak to someone in a company in the UK.
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its quite mad that the money you may be gifting was earnt overseas and the UK gov should have no right to it at all. I would like to find out from someone living in HK whether the UK gov has ever tracked someone down here to collect inherritance tax. I assume if we died here the UK embassy would be informed even though I really don't care if they know or not. It really bugs me the prospect of this tax even though not one cent of my savings was earned in the UK.
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Many thanks for the above comments. It seems to be a tricky area. However, something else I am considering is gifting my London apartment to my daughter. I believe she would have to pay stamp duty on transfer and I would have to live for seven years beyond the gift date. My principal concern there isn't so much the taxman taking a large slice as the bloke she might fall for getting his feet under the table, splitting in due course (as seems to happen with most marriages and relationships nowadays) and grabbing at least half of the value of the apartment. Whilst I am alive, how can I stop that happening? Joint mortgage, her name and mine?
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IRG
15 yrs ago
Hi Hecules,
Please see personal message that I am about to send you.
All the best
IRG
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IRG
15 yrs ago
When my own father died in 2008 my siblings and I ended up giving a lot to HMRC in the UK, that hurt a lot especially as it was just as the property market collapsed - the properties were assessed at the pre-collapse value, but we ended up with properties valued at the post-collapse value - nightmare!
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Many thanks for your comments and advice. The easiest solution would appear to sell allproperty and put the cash into a joint bank security box before dying. The cash is untraceable as far as the British Government is cocerned - they obviously for UK citizens who die in Hong Kong and go after their benificiaries if they are UK citizens. If they aren't UK citizens then I guess they can't touch them regardless.
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you could stick the property in a trust or an off shore business, but best to talk to an inheritance tax expert... I'm in the process of trying to figure all this out. If the property is in a trust, then any partner of your daughter wont be able to claim half.
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Whether you are subject to UK inheritance tax on non-UK assets depends whether you are deemed to be domiciled in the UK upon your demise. The HMRC takes a number of factors into account, including residency, ties to UK etc.
Please PM me if you'd like to discuss this further.
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