Before we start to talk about inheritance tax planning – have you even made a will? If you have not, it will not be your wishes but the state who decides how to distribute your belongings after your demise.
If you are living abroad or own assets that are based in foreign countries, you may wish to consider making a will not only to ensure that your wishes are put into practice, but also to make sure that your assets are listed in a place that gives your executors an idea about where to start administering your estate.
If you have never considered your potential inheritance tax bill, you may be surprised by how much it is. Your intended beneficiaries would certainly be horrified!
If you are considering taking steps to mitigate your IHT bill in the United Kingdom, you may be interested to learn that some of these schemes take up to seven years to put in place. Even if you are far from calling yourself elderly, this does mean that UK IHT planning should be started sooner rather than later.
However, one option that may be available to you may be a Qualifying Non UK Pension Scheme. Based in a wide range of countries overseas, these foreign pensions have been confirmed to be exempt from UK IHT.
They are, as their name suggests, pension schemes, so you can draw an income or withdraw lump sums from them during your lifetime in the same way that you can with a normal pension scheme. However, the difference is that by transferring assets or cash to them, the IHT protection is immediate.
Getting a QNUPS may also offer other advantages over a UK based pension. For example, QNUPS are not investment controlled, which means that they are not subject to the same strict rules about what assets they can hold. So your foreign may be able to hold fine wines, or even antiques!