Death Tax

Old Nov 1st 2010, 1:44 pm
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Question Death Tax

I know this is a morbid subject but as Pink Floyd said "we all have to die sometime"
My question, and this may have been asked in the past, is I am a Canadian Citizen, British Subject and a Permanent Resident of the US with no real desire to take out US Citizenship. When I die with my "estate" be subject to death taxes from the UK and Canada no matter how my will is written? My wife heard this from a friend and is obviously concerned.
Thanks for any help
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Old Nov 1st 2010, 5:51 pm
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Default Re: Death Tax

Originally Posted by imascouse View Post
I know this is a morbid subject but as Pink Floyd said "we all have to die sometime"
My question, and this may have been asked in the past, is I am a Canadian Citizen, British Subject and a Permanent Resident of the US with no real desire to take out US Citizenship. When I die with my "estate" be subject to death taxes from the UK and Canada no matter how my will is written? My wife heard this from a friend and is obviously concerned.
Thanks for any help
If you are a US PR ie you're living in the US...from what I understand your assets would be subject to US tax laws. One advantage to becoming a USC is a more favourable inheritance tax. Whether UK or Canadian taxes would have to be paid I have no idea.
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Old Nov 1st 2010, 6:32 pm
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Default Re: Death Tax

Sounds complicated .

From the UK side

If you have a UK domicile UK Inheritance Tax will apply if not you do not need to worry. Domicile essentially means what was the nationality of your father at your birth and which country did he consider to be 'home'?

Secondly how long have you lived in the UK? If less than 17 years and you do not intend to spend the rest of your days here you do not have a problem.

I have really kept this very brief and there is a lot more to the UK rules than that but those are the important bits!
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Old Nov 1st 2010, 7:50 pm
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Default Re: Death Tax

Originally Posted by imascouse View Post
I know this is a morbid subject but as Pink Floyd said "we all have to die sometime"
My question, and this may have been asked in the past, is I am a Canadian Citizen, British Subject and a Permanent Resident of the US with no real desire to take out US Citizenship. When I die with my "estate" be subject to death taxes from the UK and Canada no matter how my will is written? My wife heard this from a friend and is obviously concerned.
Thanks for any help
Very difficult question to answer without some further research- I'm very familiar with the Estate Tax treaty between the US and the UK, but throw in a third country and potentially two additional treaties and you have the recipe for a real pickle. Definitely not an area to try and "do it yourself"...
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Old Nov 1st 2010, 8:19 pm
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Default Re: Death Tax

I agree with Peter Newton. May be worth getting this checked out just for peace of mind if anything!
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Old Nov 1st 2010, 11:12 pm
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Default Re: Death Tax

Originally Posted by Jerseygirl View Post
If you are a US PR ie you're living in the US...from what I understand your assets would be subject to US tax laws. One advantage to becoming a USC is a more favourable inheritance tax. Whether UK or Canadian taxes would have to be paid I have no idea.
Thanks for all your input. I left the UK and emigrated to Canada at the age of 24. Married a Canadian girl and became a citizen. Got divorced and moved to the States after 13 years. A few years later I married a Yank and did not take out citizenship. Been there done that not good karma . But somebody told us that they became a US Citizen to avoid paying taxes when they die to other countries, ie England. Now my wife is worried, must expect me going first . Anyway I guess I will have to get a Lawyer to check it out, Oh joy. Keep the replies coming if any new news should come up.
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Old Nov 1st 2010, 11:17 pm
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Default Re: Death Tax

Originally Posted by imascouse View Post
Thanks for all your input. I left the UK and emigrated to Canada at the age of 24. Married a Canadian girl and became a citizen. Got divorced and moved to the States after 13 years. A few years later I married a Yank and did not take out citizenship. Been there done that not good karma . But somebody told us that they became a US Citizen to avoid paying taxes when they die to other countries, ie England. Now my wife is worried, must expect me going first . Anyway I guess I will have to get a Lawyer to check it out, Oh joy. Keep the replies coming if any new news should come up.
Perhaps you could try the link at the bottom of post #4...he may be able to advise you. Good luck.
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Old Nov 1st 2010, 11:17 pm
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Default Re: Death Tax

Originally Posted by imascouse View Post
Thanks for all your input. I left the UK and emigrated to Canada at the age of 24. Married a Canadian girl and became a citizen. Got divorced and moved to the States after 13 years. A few years later I married a Yank and did not take out citizenship. Been there done that not good karma . But somebody told us that they became a US Citizen to avoid paying taxes when they die to other countries, ie England. Now my wife is worried, must expect me going first . Anyway I guess I will have to get a Lawyer to check it out, Oh joy. Keep the replies coming if any new news should come up.
Do you have property or assets in the UK ?
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Old Nov 2nd 2010, 12:07 am
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Default Re: Death Tax

Originally Posted by imascouse View Post
Thanks for all your input. I left the UK and emigrated to Canada at the age of 24. Married a Canadian girl and became a citizen. Got divorced and moved to the States after 13 years. A few years later I married a Yank and did not take out citizenship. Been there done that not good karma . But somebody told us that they became a US Citizen to avoid paying taxes when they die to other countries, ie England. Now my wife is worried, must expect me going first . Anyway I guess I will have to get a Lawyer to check it out, Oh joy. Keep the replies coming if any new news should come up.
If I were you, or actually if I were your wife, I would be WAY more proactive about finding the information instead of paying some lawyer to do the research. Your situation is highly unique (esp as you wrote British Subject in the OP, don't know if that will make a difference).

The issue about the US portion of it is addressed in the "Pro" column of the pro/con to naturalizing to US citizenship article in the wiki here.
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Old Nov 2nd 2010, 2:52 am
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Default Re: Death Tax

It's not a death tax, it is an estate tax. Get rid of your property before you die unless you find a way to take it with you and they won't tax it.
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Old Nov 2nd 2010, 3:06 am
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Default Re: Death Tax

Originally Posted by imascouse View Post
Thanks for all your input. I left the UK and emigrated to Canada at the age of 24. Married a Canadian girl and became a citizen. Got divorced and moved to the States after 13 years. A few years later I married a Yank and did not take out citizenship. Been there done that not good karma . But somebody told us that they became a US Citizen to avoid paying taxes when they die to other countries, ie England. Now my wife is worried, must expect me going first . Anyway I guess I will have to get a Lawyer to check it out, Oh joy. Keep the replies coming if any new news should come up.
As a further explanation. I no longer own property in either the UK or Canada. I use the term British Subject as I have a British Passport that expired in 1989 and have not renewed it. Thought about it many times but continue to travel the world on my Canadian Passport. I figured that when it came to retire , which is about 10 years away at this rate , if I am lucky, then I have a wonderful opportunity . I can retire here in the States, Canada or Europe without too much hassle. Maybe I am oversimplifying it. Plus it just feels wrong to give up the rest to become a US Citizen and the only advantage I see is so I can vote. I guess I have a hard time giving up my Liverpool roots
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Old Nov 2nd 2010, 5:12 am
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Default Re: Death Tax

Canada does not have an inheritance/death tax. Since you don't even own property in Canada you would not even owe the capital gains tax on the 'deemed disposition' on the property as the Canada Revenue Agency calls it. That leaves the UK and USA to fight it out.
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Old Nov 2nd 2010, 1:57 pm
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Default Re: Death Tax

Originally Posted by imascouse View Post
I use the term British Subject as I have a British Passport that expired in 1989 and have not renewed it.
You're still a UK citizen whether or not you have a valid passport.


Plus it just feels wrong to give up the rest to become a US Citizen and the only advantage I see is so I can vote.
What? You don't have to "give up the rest"! I am a UK citizen, a Canadian citizen, and a US citizen. I have 3 valid passports and always travel internationally with at least 2 of them.

Ian
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Old Nov 2nd 2010, 6:06 pm
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Default Re: Death Tax

Originally Posted by imascouse View Post
Maybe I am oversimplifying it. Plus it just feels wrong to give up the rest to become a US Citizen and the only advantage I see is so I can vote. I guess I have a hard time giving up my Liverpool roots
Maybe you are, or have misinformation... what do you mean about giving up the rest?

The thing is, with the benefits of all those citizenships, there are also responsibilities. You should want to know about those ahead of time so you can position your assets in the way that serves YOU best, not be caught short unexpectedly.
Good luck
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Old Nov 3rd 2010, 5:48 pm
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Default Re: Death Tax

Hi, The revenue will go after a British non UK residents worldwide assets for IHT if they have any financial ties to the UK. We have seen it recently in the high courts. As a international IFA most of our work is helping to protect expats from HMRC!

Happy to answer any questions about IHT planning.
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