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The implications of the changes to the inheritance tax rules for UK resident non-domiciles in the Finance Bill 2016.
KEY POINTS
- New 15 of 20 years deemed domicile rule.
- Use of settlor-interested offshore trusts for foreign assets.
- Problems for individuals caught by the formerly domiciled resident rule.
- Treatment of UK property held by offshore structures owned by non-domiciles.
The draft legislation in Finance Bill 2016 amends IHTA 1984 s 267 so that individuals will be deemed UK domiciled for inheritance tax purposes where:
- they are not domiciled in the UK under common law principles; but
- they have been UK domiciled within the past three years;
- they are formerly domiciled resident; or
- they have been UK tax resident for not fewer than 15 of the last 20 years in which the year of assessment falls.
The term ‘formerly...
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