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Readers’ forum: Does UK inheritance tax apply to 401K?

© Copyright LexisNexis 2024. All rights reserved.

14 February 2023

Issue: 4876 / Categories: Forum & Feedback

US assets

My new client was born outside the UK but has been resident here for 50 years. I therefore believe that inheritance tax will apply to worldwide assets being deemed to be domiciled in the UK.

He has a number of assets in the US including a 401K which I understand to be equivalent to the self-invested personal pension (SIPP) in the UK. UK SIPPs are free from IHT but would that also apply to the value of the 401K?

What do Taxation readers think?

Query 20 079 – Passerine.

401k plans do not have the same status as UK pensions for IHT purposes.

Unfortunately US 401k plans do not have the same status as UK pensions for IHT purposes. UK pensions are structured as trusts (with favourable tax treatment that avoids IHT relevant property charges) meaning that the assets are outside the personal...

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Readers’ forum: Does UK inheritance tax apply to 401K?

© Copyright LexisNexis 2024. All rights reserved.

14 February 2023

US assets

My new client was born outside the UK but has been resident here for 50 years. I therefore believe that inheritance tax will apply to worldwide assets being deemed to be domiciled in the UK.

He has a number of assets in the US including a 401K which I understand to be equivalent to the self-invested personal pension (SIPP) in the UK. UK SIPPs are free from IHT but would that also apply to the value of the 401K?

What do Taxation readers think?

Query 20 079 – Passerine.

401k plans do not have the same status as UK pensions for IHT purposes.

Unfortunately US 401k plans do not have the same status as UK pensions for IHT purposes. UK pensions are structured as trusts (with favourable tax treatment that avoids IHT relevant property charges) meaning that the assets are outside the personal...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

Issue:

4876

Categories: Forum & Feedback [1]

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