Non-domiciled holders of whole-of life policies may no longer qualify for an exemption of inheritance tax under new HMRC rules, sparking the need for revised estate planning to avoid unexpected tax bills, Skandia has warned.
Under new proposals HMRC requires greater tests to be carried out to determine whether a policy is considered to be situated outside of the UK and therefore qualifies for an exemption of inheritance tax. The tests could mean that policies, which were written 'under seal' and taken abroad, could now be hit with up to 40% UK inheritance tax. The method of estate planning has been popular over the years, with the UK attracting wealthy individuals from across the world. However, Skandia warned that affected clients could now be hit with unexpected tax bills on their death if they are n...
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