Non resident and inheritance tax
Question:
Thanks for reply to last. I am doing the right thing seems i still have to pay tax on rent income,
Another point is the situation of any estate, in event of my death ,left to my Kenyan wife ie. my house in UK , may be if it was sold or continue to be rented out by her how would she stand for tax
Answer:
It depends primarily on your domicile status. Although you're a non UK resident you could still be UK domiciled unless you have severed all UK ties and intend to live in another country for the rest of your life. Many expats retain a UK domicile even if non resident.
Assuming you're UK domiciled then your UK and overseas estate would be subject to UK inheritance tax. Note that any amounts left to your wife would ordinarily be covered by the interspouse transfer exemption. However, there is a restriction in the interspouse transfer exemption to £55,000 if the transfer is from a UK domiciled spouse to a non UK domiciled spouse. Any amounts above that are classed as normal transfers and can be included in your estate and subject to IHT (after the nil rate band is taken into account).
Your wife would hold the property for CGT purposes at its probate value, and any CGT on a future disposal would be based on the future uplift from that amount.
About the Author
The Author of this article/answer is our site Editor, Lee Hadnum. Lee is a rarity among tax advisers having both legal and chartered accountant qualifications. After qualifying a prize winner in the Institute of Chartered Accountants exams, he also went on to become a chartered tax adviser (CTA).He worked in Ernst & Youngs Entrepreneurial Services department for a number of years before setting up his own tax planning practice. He is now a full time tax author.
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