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Are offshore assets liable for UK inheritance tax?

Are assets that are held abroad and are they liable for UK inheritance tax? The answer is; it depends.

Assets held by foreign individuals not domiciled in the UK

If you're a not a UK citizen, you are not domiciled in the UK, then your offshore assets are not included under the UK inheritance tax regime.

For example, a French citizen, would not expect to pay UK inheritance tax on assets held in France.

How is UK domicile determined?

You are considered to have UK domicile if:

- you were born in the UK;

- your father was born in the UK;

- you have been living in the UK for 15 out of the last 20 years.

Assets held by UK domiciled individuals

If you are UK domiciled, then all your worldwide assets are liable to UK inheritance tax. It doesn't matter what those assets are, whether it's cash, investments or property.

Once you qualify for UK inheritance tax, your worldwide assets are liable. Estate planning can help, but you need to take expert advice especially with offshore assets.