| Non-motoring > IHT Again | Miscellaneous |
| Thread Author: Bromptonaut | Replies: 6 |
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New Sun 7 Oct 18 23:26
IHT Again - Bromptonaut
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Looking for pointers, not direct answers. Mrs B's brother is 58. He has a long term female partner his own age. No children and no realistic possibility he'll have them now. He owns a house in France worth about 80k Euro and has made a will leaving it and presumably rest of his estate to his niece and nephew, my adult children, in equal shares. His main home is in Cork Eire and I don't know whether will was made there or in UK. He's UK born but but in process of taking Irish citizenship. If 'home is where the heart is' he's probably domiciled in Ireland rather than UK. Conversations with others in area, either expats or French have put wind up him iro French laws on inheritance and tax on estates. Realistically he's going to need proper (ie paid for) advice but it would be helpful to have some idea around subject first. Can anyone point me/him to suitable reading? |
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New Sun 7 Oct 18 23:46
IHT Again - No FM2R
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Funnily enough I was being lectured about this over a pint the other day. My advisor, who is a pretty smart chap, had got an associate with him from another company and he was lecturing me on just this point. IHT is based on domiciklity which means essentially whatever HM In particular it seems a hazardous area prone to double taxation. Domicility is a f. nightmare. It is not related entirely to either nationality or residency. The UK will tax world wide assets for anybody it deems domiciled in the UK. e.g. Richard Burton lived in Switzerland for the last 30 years of his life. He was buried in a plot he had purchased some years before, also in Switzerland. Because he was buried with a copy of Dylan Thomas' poems with a Welsh Flag draped over his coffin, the UK Tax authorities deemed him emotionally attached to his domicile of origin and taxed his estate a couple of million quid despite the fact that the Swiss took a chunk as well. [though that was minimised given the area he lived in which apparently has slightly different tax laws].. There is no choice. Get an international Financial Advisor. And make it a clever and experienced one. The normal home grown ones practiced in a single country will not help you [him]. I will happily ask my guy if he has a suitable contact if you wish. If so, email me. |
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New Mon 8 Oct 18 07:43
IHT Again - Zero
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>> Mrs B's brother is 58. He has a long term female partner his own age. >> No children and no realistic possibility he'll have them now. >> >> He owns a house in France worth about 80k Euro and has made a will >> leaving it and presumably rest of his estate to his niece and nephew, my adult >> children, in equal shares. If I were Mr's B's brothers long term female partner, I'd be looking to end the relationship taking as much of his estate as I could. |
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New Mon 8 Oct 18 09:50
IHT Again - Bromptonaut
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>> If I were Mr's B's brothers long term female partner, I'd be looking to end >> the relationship taking as much of his estate as I could. They met in last few years. She has her own home in Ireland, property of her own in France and presumably other assets. She has adult children from a dissolved marriage. No business of mine but I suspect they've chosen to keep their finances separate. |
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New Mon 8 Oct 18 09:27
IHT Again - CGNorwich
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| axis-finance.com/tax/french-inheritance-tax/ |
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New Mon 8 Oct 18 10:14
IHT Again - Ambo
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Thanks for that lead, CG; it will help a lot with a problem impending for an ex-colleague's wife. |
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New Mon 8 Oct 18 10:30
IHT Again - Mapmaker
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>>Conversations with others in area, either expats or French have put wind up him iro French laws on inheritance and tax on estates. So many people spend so much money on tax advice during their lives, worrying about what will happen to not very much money when they are dead. When they have no dependants themselves that is a waste of money. Better off spending the money on themselves. I hate to say it, but €80k isn't much money... and advice will be expensive. For the sake of your children, of course, it would be better sorted out now, but your brother-out-law needs to decide how much of his precious cash he wants to spend whilst he is still alive, for the sake of YOUR children after he is dead, potentially many years hence. (By which point he may no longer own the French property anyway.) It seems they will have French IHT of 55% to pay anyway, so they will likely be selling the property to pay the tax liability. No idea whether any of this is right, it is written with scant knowledge of your B-o-L’s circumstances, and even less knowledge of French and Irish IHT, so take it all with a pinch of salt and as the ramblings of a madman (and no idea whether he can convince HMRC that he is Irish domiciled): "In the absence of a surviving spouse, or children, the deceased is able through a will to freely dispose of their entire [French] estate as they wish." www.french-property.com/guides/france/finance-taxation/inheritance/rights/no-surviving-spouse/#2.3.3. Generally you would not expect IHT to be charged by more than one country. Two countries would be likely to share the tax. e.g. France 55% (for nephews/nieces), Ireland 20%. If you're Irish and your French house is caught at 55%, then there would probably not be further Irish tax to pay. If you're French and your Irish house is caught at 20% then there would probably only be a further 35% to pay in France. A common process for mitigating French inheritance laws has been to hold the property in a (UK) company – such that the item in the estate is shares in a (UK) company, not a French property. You then potentially end up with problems with a benefit in kind when you occupy the house, but HMRC agreed (and I’ve no idea what the Irish position is) that when the property is overseas that the BIK rules would not apply (given certain conditions your b-o-l would likely satisfy). French companies are likely to be simpler than UK from a tax perspective, but running a French company is an administrative nightmare which could easily cost your B-o-L (I’m completely guessing here as to costs, but France is a dreadful place as it is hugely bureaucratic) as much as the property is worth over the next twenty years. www.expatica.com/fr/finance/french-inheritance-law-tax-wills_101812.html www.russell-cooke.co.uk/media/2024/french_inheritance_law_brochure_2011.pdf www.justlanded.com/english/France/Articles/Property/Company-Purchases Given the shocking rate of French IHT on gifts to remote relatives he’s quite possibly best off selling the house before death – potentially to your children, no idea what French IHT anti-avoidance rules would say about that. And there would be transaction fees (stamp duty and notaire’s fees) of about 10% on the sale plus Irish IHT of 20% on the proceeds (or gift of cash to them to buy the house), but cheaper than French IHT of 55% (and for all that there is a nil rate band for French purposes, I’m imaging his estate would be big enough to have Irish IHT on it anyway). IMO people spend large amounts of money on advice where the advice ends up a huge chunk of the cash that might be at risk from the point that is a worry; and when it is inheritance advice in the end by the time they die the problem no longer exists, e.g. the asset has been sold anyway. Having read the forgoing links and had a good think, I would give the cash I planned to spend on advice to my niece and nephew instead for them to enjoy today, and do nothing further. (I work in tax and seldom does a complicated structure that was put in years ago at great expense give any benefit when the circumstances finally come to pass that were envisaged.) |
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