If you are domiciled (born in the UK) or you are deemed domiciled in the UK, your worldwide assets are subject to UK inheritance tax, but you must account for the foreign tax in your tax planning. We always advise clients to find a local adviser in the country where the asset is held and enquire about the inheritance tax issues in that country first.

The tax is payable in the country where the asset is held but inevitably the UK’s 40% IHT is higher than almost any other country in the world, and it will depend on whether there are double taxation agreements in place or not.

If there are double taxation agreements, the tax is payable in the country where the asset is held first and then any extra tax up to 40% is payable to the HMRC.

Almost inevitably you end up paying the full 40% no matter what you do. Unfortunately that is the end result of assets held abroad and you need to plan for any assets held abroad as part of your overall planning.

As always on Trusts please ensure you get experienced advice.