July 2024 Newsletter | Cylchlythyr Misol Gorffennaf 2024
- Do you have a will in place? If so, are the terms of the will still valid and up to date? We have recently come across several cases where a will was written 20+ years ago, at a time when discretionary trusts were written into wills to minimise inheritance tax.
Since introducing the Residence Nil Rate Band in 2017, up to £1m of assets can be left by married couples to their families free of inheritance tax (subject to certain criteria).
In many simple cases, the creation of a discretionary trust in a person's will is no longer required to achieve inheritance tax savings and can lead to significant complications for the executors of the person's estate.
You may wish to revisit the terms of your will with your solicitor to ensure that it still reflects your wishes and suits your family's needs.
- Class actions against major companies are currently in progress (similar to PPI claims). Two which may be worth considering, if relevant, are for purchasers of diesel cars and for individuals who may have taken out a high interest PCP deal when paying monthly for a new car. These claims are often on a no win / no fee basis.
Ask Huw & Aled
Q: I have been offered a 2-year contract to work overseas. How does living and working overseas affect my tax residency status and will I need to pay tax both in the UK and overseas?
A: We have seen a substantial increase in enquiries in the last 6 months or so from individuals who have been offered employment roles overseas for periods of 2-5 years. It is very important to understand the impact on your tax position of moving overseas.
For the full UK tax years when you live and work overseas, your UK tax residency status depends on the number of days you spend in the UK from 6 April - 5 April each year. The number of days an individual can spend in the UK in a tax year is dependent on many factors. A comprehensive assessment must be made with reference to HMRC's Statutory Residency Tests.
Planning is key as exceeding the maximum permitted number of days in the UK can lead to unexpected and potentially disastrous financial outcomes if the overseas income is suddenly all chargeable to UK tax.
Additional complications can arise in the year of departure and year of return. In these years, the tax year can potentially be split in two, a UK part and an overseas part. This is very helpful and ensures that once you move overseas, only your UK income is subject to UK tax (and vice versa). This is called 'split year treatment' and careful and detailed planning is required to ensure that this treatment can be claimed for the year of departure and year of return.
If you are contemplating a move overseas for work, please contact Aled on 07808 798 569.
