English assets with owners domiciled or resident abroad
Our expert probate lawyers specialise in estate administration for non-domicilied individuals (deceased).
When someone non-UK domiciled dies leaving assets in England, the foreign grant of representation is unlikely to be recognised in England. In such cases an application to the English Court for a grant will be required.
If the foreign grant of representation was issued in a Commonwealth Country
Generally, if the foreign grant of representation was issued in a Commonwealth Country, it is possible to have this resealed at a Probate Registry in England.
The process is relatively straightforward although the usual IHT reporting will also need to be completed before a grant of representation. An official and court sealed copy of the grant of representation and will (if applicable) will need to be presented with the application for reseal.
The resealed grant should be sufficient authority to deal with the English asset. If a client wishes for us to deal with the post grant work for a resealed grant, then this can be arranged by signing a power of attorney authorising us to administer the estate.
If the grant was issued in a country outside of the Commonwealth
If the foreign grant was issued outside of the Commonwealth, it will not be possible to reseal the foreign grant and a full grant application in England and Wales will need to be made.
These applications can be complicated and the Court will need to be satisfied of domicile position of the deceased and the entitlement to administer the estate before issuing the grant of representation. Again, the usual IHT reporting requirements will be needed.
Who is entitled to make such an application will be dependent on the circumstances of each individual matter and we would invite you to get in touch should you require such an application so we can discuss further.
Is there anything else to consider when applying for a reseal or first grant in England and Wales?
In order to extract any form of grant of representation in England, an inheritance tax return will need to be submitted. This is regardless of whether there is inheritance tax to pay. There are two main inheritance tax accounts – one substantially more detailed than the other. Which inheritance tax account is required to be delivered depends upon the assets of the deceased and the domicile history.
Inheritance tax for non-domiciled clients can become a very complicated area of law but generally if you are domiciled outside of the UK (and not caught by the deemed domicile rules for IHT), it would only be the UK assets subject to inheritance tax. Domicile is however a tricky concept and merely living outside of the UK does not mean you are not domiciled in the UK for IHT purposes.
Q&A for non-domiciled grant applications?
What is non domicile?
For inheritance tax purposes, a non-domiciled person is someone whose domicile status is outside of the UK. The concept of domicile is not just relevant for tax purposes – it also has a role in the succession of your moveable assets situated in England and Wales. Being non-UK domiciled can be highly beneficial for inheritance tax purposes.
Domicile is very specific to each individual and merely living outside of the UK does not mean that you are not UK-domiciled.
Do non-domiciled individuals have to pay inheritance tax?
The worldwide estate of a UK domiciled individual is subject to inheritance tax at a rate of 40% over and above the nil rate band. However only the UK estate of a non-domiciled individual is subject to inheritance tax. With UK inheritance tax being one of the highest rates of tax in the world, a non-domicile status certainly can assist with tax planning opportunities.
UK domiciled clients but with worldwide assets can often become subject to tax in both the UK and the foreign jurisdiction in which the assets are held. The estate would need to look to relevant treaties or reliefs to limit the double taxation burden but these reliefs and treaties are generally only applicable when the foreign jurisdiction has also imposed a tax similar to UK Inheritance Tax which many jurisdictions do not.
What is the difference between domicile and residence?
Being resident in a country does not automatically mean you are domiciled there.
Domicile is a complex area of law and one must first look at the domicile of origin of a client to establish the initial domicile status. A domicile of origin is never permanently ‘lost’ but a new domicile of dependency (applicable to women and children married before 1974) or domicile of choice can be acquired in the lifetime of a client which supersedes the domicile of origin.
Generally, in order to obtain a new domicile of choice, there must be a permanent intention to remain in another country alongside physical permanent residence there.
The domicile of a client is an entirely different concept from the tax residency for income and capital gains tax purpose. Generally, the residency test for income tax purposes is an assessment of the number of days a person spent in the UK during a tax year. This is often known of the statutory residence test.
It is entirely possible to be a non-UK domiciled individual for IHT purposes but a UK resident for income tax and CGT and vice versa.
How do I lose my domicile status?
Losing a domicile and acquiring a new domicile of choice (or reviving a domicile of origin) can happy very quickly but you would need to show complete abandonment of the previous domicile. For example, if a UK domiciled client sold all of his assets in the UK, boarded a plane to Germany, moved all of his assets across to Germany and planned to spend the rest of his life and retirement in Germany, they would have acquired a new domicile of choice at that time.
However, for inheritance tax purposes, there is also the concept of deemed domicile and following an amendment of the rules in April 2017 it is easier than ever to be caught by the deemed domicile rules. Generally if you are living in the UK for at least 15 of the last 20 tax years immediately before the year of the event then you will be caught by the deemed domicile rules. In addition, an additional category of ‘returning UK domiciliary’ was introduced in 2017 for deemed domicile. Generally to fall into this category you would have a UK domicile of origin, have moved and become domiciled outside of the UK but later (whilst retaining your non-UK domicile) became resident in the UK.
Usually a number of years of non-residence (often six clear and complete tax years) will ‘shake off’ the deemed domicile but you should obtain legal advice specific to your circumstances on your potential exposure to the deemed domicile rules as it is not possible to cover all scenarios within this question.
In summary, a person who is non-domiciled under the general law can still be deemed domicile for tax purposes.
How do I reseal probate in the UK?
Reseals are issued by the Probate Registry in England and Wales.
In order to obtain a resealed grant, the estate will need to complete the required inheritance tax reporting and pay the inheritance tax due (if any) The inheritance tax reporting and tax payable depends upon the value and nature of the deceased’s estate at date of death.
An official copy of the grant certified by the issuing court in the foreign jurisdiction will need to be provided alongside a similarly certified copy Will (if there is one) in order to obtain a grant. The personal representatives also need to supply the appropriate authority for a resealed grant to be issued.
Our expert team of lawyers are experienced in making such applications and can guide you through the process.
Why would a will be resealed?
Foreign grants of representation are not usually recognised by English companies or the Land Registry. Therefore, in order to deal with English assets, a resealed grant will be required (if the foreign grant was issued in a Commonwealth country) or otherwise a full grant of representation issued in England & Wales would need to be provided (if the grant was issued outside of the Commonwealth).
Whether a grant needs to be resealed depends upon the type of asset held in England and the financial company. For example, individual banks have differing thresholds on releasing funds without sight of a valid grant of representation. NS&I, one of the UK’s largest financial companies supported by the government, has a threshold of £5000 before insisting on a resealed grant. If property (real estate) is owned in England, then the Land Registry would need to see a grant of representation.
It is not the Will which is resealed, it is the grant issued by the Commonwealth country. It is entirely possible to reseal a grant of letters of administration (or similar) in the UK if the deceased did not leave a valid Will.
More about the team
We are a team of 11 specialist probate lawyers – one of the largest and most experienced in the South East, covering London, Kent, Sussex and Surrey. This means your matter will be dealt with effectively, efficiently and there will always be a member of the team available to help.
As a full-service law firm we can draw on our years of expertise to help administer even the most complex estates to provide our clients with peace of mind.
Our accreditations include:
- Most of our team who supervise and manage the preparation of wills are members of The Society of Trust and Estate Practitioners (STEP). It has published a Code for Will Preparation in England and Wales and as a firm, we adhere to this code in relation to work we do in connection with wills in this jurisdiction. We are independent and are not part of any other company or group. You can view the code on their website: www.step.org/ or we can send you a copy on request.
- Band 1 in Chambers HNW and The Legal 500
- Listed as one of the top law firms by ePrivateClient
- Kent Business Legal Sector Review 2021 – scored us as number 1 for private client quoting “ TSP leads the pack for Private Client once again”
- Lexcel - The practice is accredited by Lexcel for our excellence in legal practice management
- All of our partners are also listed as Citywealth leaders.