Deedee13

i heard something interesting the other day, and it pertains to this topic.. which is I suppose a plus.
If ur a pr and married to a usc, you will get taxed to the hilt if spouse dies, but as a usc u dont? anyone care to explain?

JAJ

The reason is because USCs are then subject to lifetime tax on the income, whereas it's a lot easier for a non-USC to expatriate.

candy wy.

Only if it is over 2million

Deedee13

hmmm,

Folinskyinla

Hi:

This keeps changing every year and is due to sunset in 2010.

Also, I note that people often use the term of "inheritance tax" when they really mean "estate tax." California used to have an "inheritance tax" which was eliminated by initiative nearly 30 years ago. However, California retains a "pickup tax" which relates the reduction in Federal Estate Tax if California did have an inheritance tax.

Englishmum

I haven't a clue what is meant here by "sunset". Please explain if you don't mind!

Ray

That law /rule It ends .....

Giantaxe

and unless Congress acts, it will reappear in 2011.

http://www.seniorlaw.com/estatetaxrepeal.htm

tamms_1965

We used my US attorney for our mirror wilsl; It was about $150. UK hubby has no assets in UK anymore except bank account with small balance for gifts, etc. However, he has a UK financial advisor/consultant handling his UK retirement funds.

Bob

definitely have a separate will for each country relating to assets held in that country...and if you are snow bird type people, to have one perhaps in either state you reside in...

im9907620

A Will in each country covering the respective assets is a must. Living Trusts are very useful too, as, like the UK, the costs of probate can mount up quickly for distributing an estate via Will. DIY is fine for straightforward stuff but be careful.

Do remember that if you are a UK national, then you will be considered as UK domiciled for inheritance tax for 17 out of the last 20 years. However, if you have cut virtually every tie and your visits to the UK are irregular then you may elect to come under US estate taxes - which after all are far more generous for US citizens (not resident aliens) and are likely to stay that way after 2010. Though in the UK with the intended transfer IHT allowance, couples right now have £600,000 and possibly upto £700,000 by 2010. 2010 could be an interesting year both sides! Immovable property will always be taxed in the country of location. The double tax treaty can be used to avoid paying tax twice.

Also any trusts set up within 5 years of moving to the US can be caught by income tax and estate tax particularly if the settlor/donor is not excluded from benefitting. In theory this could apply to UK life policies in trust, incl investment bonds.

JAJ

In reality, if your assets are no longer in the United Kingdom and your will is in another jurisdiction, I see no realistic way for the UK authorities to even know about your estate, let alone try to tax it.

im9907620

Yes, if you have no UK assets then, reasonably you would be deemed to have a new domicile of choice, unless of course one returns to the UK permanently and then the whole question arises again only possibly more complicated!!

Edwina

Could someone advise what happens in the case where a us citizen inherits proceeds from a UK house sale from a relative. What are the tax implications there?

I presume double taxation agreements kick in and its just the US that you'd pay it in

Elvira

No.

It is the Estate that is taxed, not recipients of the inheritance.

Inheritance tax will be payable in the UK.

I believe if the estate exceeds some figure ($100k??........ not sure...) some sort of form has to be filed with the IRS - but no tax is payable.