Inheritance Tax - If expat dies abroad

[servodude]

He is still dead and I have not changed anything. It is you who mistakenly assumed that he may have changed his domicile when he left the UK. I asked the original question with the assumption that he was UK domiciled, and that is why I made it clear that he intended to return to the UK after 10 years working in Dubai. He did not survive the 10 years in Dubai though. He is still dead.

I have not mistakenly done anything but I assumed that irrespective of what his intentions were, the fact is that he is no longer with us and I assume that the beneficiary of his Will will not want to pay IHT to the UK Exchequer. Thus take the facts as they are not as might have been had he lived. It looks as if the executors of his Will can show that he is in fact domiciled outside of the UK. That is to the benefit of the estate. I cannot imagine that HMRC trawl the death of every UK citizen who dies outside of the UK, but maybe they do.If the funeral and cremation/burial is in Dubai then the whole episode is offshore. He has no connection to the UK other than his passport and would seem to have had his life settled outside of the UK. In these circumstances I think it is best to forget what he may have said he intended in 4 years time to return to the UK because apart from anything else he might have changed his mind in that time.

Dod

Doesn't a lot of that depend on "how" he was intending to return?
e.g. paying NICs would look a bit of a flag.

Part of the changes to the rules in 2017 was to allow them to reach in to traditional forms of avoidance for assets held in the UK by folk who have left; I don't know if that's taken the incentive off them to go after one's complete estate if they think they have a claim. As previously pointed out they'd need to be aware of the possibility first.

FWIW it's recommended to formally declare domicile to avoid the (over)reach of HMRC

[Tara]

I agree that the question is ultimately about his dom or non-dom status. The issue of whether or not he intended to return to the UK is not something easily proven or disproven, since it is ultimately a mental state that could change. How would someone prove that intention? Or lack of it? Rather you have to look at his behaviour and I suspect that things like the following would be taken into account:

1) Did he close all UK bank accounts, or keep at least one open?

2) Is he still registered with the NHS? Did he retain some kind of UK address for official purposes?

3) Has he taken another passport? In particular does he still have a UK passport and, even more importantly, has he renewed one since we went away?

4) Has he retained any UK assets? I think you said not.

5) Did he make a Will in his new country? Or still have a UK Will? Where are his funeral intentions?

6) Did he return to or visit the UK regularly? How often and for how long?

And so on. May I ask what your interest is in this situation and your relationship to this man and his sister? I had originally thought that you were asking a hypothetical question since you used the words "For example" before describing the situation.

It is just a hypothetical situation, and so no relationship with the man or his sister.

So let us assume that he is clearly UK domiciled. He kept a UK address, and his NHS registration, and a UK bank account open with a few pounds in it. He only had a UK passport, and he only had a UK will. He intended to return to the UK when he had stopped working in Dubai, and he returned to the UK every year to see his friends.

So his sister clearly owes HMRC about £700,000 in Inheritance Tax.

The original question was “are there any particular issues or problems for HMRC in correctly taxing the estates of expats who die overseas and who have all of their assets outside of the UK?”

There seems to be a large “Tax Gap” in the UK between what is owed to HMRC, and what is collected by them. An example such as this one would possibly make it difficult for HMRC to collect the tax correctly if the sister chooses not to send them a cheque for £700,000 from her home in Dubai.

So the question was basically what does HMRC do in such a situation? What would happen if the sister does not send the cheque for £700,000 to HMRC? Does HMRC just forget about it and write it off? Or would they consider it to be a very serious matter and pursue her? How is such a situation likely to work in practice?

So it seems that there is not much that HMRC can do in such a situation if the sister does not send the cheque for £700,000.

No wonder there is such a big “Tax Gap” problem in the UK.

[roger4]

The rules on "Domicile" were changed a few years ago and now you can be considered "domiciled in UK" if you return for a period of more than 2 weeks and stay with a relative for that period. HMRC consider that sufficient to establish "Family Ties". For that reason, on all my trips to UK over the past decade I have stayed in hotels and have the invoices to prove it.

HMRC can even claim "Family Ties" if you visit for longer than 2 weeks despite opting to be taxed in your country of residence. It is an iniquitous system.

Roger

[Dod101]

The rules on "Domicile" were changed a few years ago and now you can be considered "domiciled in UK" if you return for a period of more than 2 weeks and stay with a relative for that period. HMRC consider that sufficient to establish "Family Ties". For that reason, on all my trips to UK over the past decade I have stayed in hotels and have the invoices to prove it.

HMRC can even claim "Family Ties" if you visit for longer than 2 weeks despite opting to be taxed in your country of residence. It is an iniquitous system.

Roger

That may be so but it sounds iniquitous to me. If I have a sister living and settled in Western Australia and stay with her for a coup[le of weeks in their summer I can hardly be regarded as domiciled in Australia.

HMRC is surely not the arbiter. In any case 'family ties' are not, or at least were not sufficient for domicile to be retained. I cannot believe that that act in itself will annul any other attempt to lose domicile, such as having no assets, no bank accounts in the 'old' country, a stated intention, say in a Will, to be buried in your new country and so on. I appreciate that this subject can arouse a lot of scare stories amongst overseas residents and that domicile cannot be easily lost but I cannot believe that staying with a relative for a couple of weeks is going to change anything, assuming that is, that all other conditions have been fulfilled.

You do not normally in any case 'opt to be taxed in your country of residence'.

Dod

[servodude]

The rules on "Domicile" were changed a few years ago and now you can be considered "domiciled in UK" if you return for a period of more than 2 weeks and stay with a relative for that period. HMRC consider that sufficient to establish "Family Ties". For that reason, on all my trips to UK over the past decade I have stayed in hotels and have the invoices to prove it.

HMRC can even claim "Family Ties" if you visit for longer than 2 weeks despite opting to be taxed in your country of residence. It is an iniquitous system.

Roger

That may be so but it sounds iniquitous to me. If I have a sister living and settled in Western Australia and stay with her for a coup[le of weeks in their summer I can hardly be regarded as domiciled in Australia.

HMRC is surely not the arbiter. In any case 'family ties' are not, or at least were not sufficient for domicile to be retained. I cannot believe that that act in itself will annul any other attempt to lose domicile, such as having no assets, no bank accounts in the 'old' country, a stated intention, say in a Will, to be buried in your new country and so on. I appreciate that this subject can arouse a lot of scare stories amongst overseas residents and that domicile cannot be easily lost but I cannot believe that staying with a relative for a couple of weeks is going to change anything, assuming that is, that all other conditions have been fulfilled.

You do not normally in any case 'opt to be taxed in your country of residence'.

Dod

If you did pass away in WA you might be thankful of being considered domiciled there given the IHT differences!

But really HMRC have a reputation for being pretty onerous about this.
When returning to the UK started to looked less likely for us, I took advice regards making sure to distance myself as much as possible. I think I would have been OK given my age, timing and situation - but I know people who have had issues because of pensions (and not just because they stop adjusting them when you emigrate!)
They officially had a chance of a claim on my FiL's estate with he passed away earlier this year; even though he was a 10pound pom at 8 years old, he never took Australian citizenship. The executors this side were proactive in making sure domicile was established as part of tidying everything up.

I do think HMRC honed their art on the whetstone of folk retiring to the likes of the South of Spain; that might change now that's a smaller pool of fish. Better to be explicit than rely on the anecdotes of folk on the internet; especially given this stuff changes.

-sd

[Dod101]

That may be so but it sounds iniquitous to me. If I have a sister living and settled in Western Australia and stay with her for a coup[le of weeks in their summer I can hardly be regarded as domiciled in Australia.

HMRC is surely not the arbiter. In any case 'family ties' are not, or at least were not sufficient for domicile to be retained. I cannot believe that that act in itself will annul any other attempt to lose domicile, such as having no assets, no bank accounts in the 'old' country, a stated intention, say in a Will, to be buried in your new country and so on. I appreciate that this subject can arouse a lot of scare stories amongst overseas residents and that domicile cannot be easily lost but I cannot believe that staying with a relative for a couple of weeks is going to change anything, assuming that is, that all other conditions have been fulfilled.

You do not normally in any case 'opt to be taxed in your country of residence'.

Dod

If you did pass away in WA you might be thankful of being considered domiciled there given the IHT differences!

But really HMRC have a reputation for being pretty onerous about this.
When returning to the UK started to looked less likely for us, I took advice regards making sure to distance myself as much as possible. I think I would have been OK given my age, timing and situation - but I know people who have had issues because of pensions (and not just because they stop adjusting them when you emigrate!)
They officially had a chance of a claim on my FiL's estate with he passed away earlier this year; even though he was a 10pound pom at 8 years old, he never took Australian citizenship. The executors this side were proactive in making sure domicile was established as part of tidying everything up.

I do think HMRC honed their art on the whetstone of folk retiring to the likes of the South of Spain; that might change now that's a smaller pool of fish. Better to be explicit than rely on the anecdotes of folk on the internet; especially given this stuff changes.

-sd

It is now of only academic interest to me but it is interesting, thank you. I am not and never have been any sort of expert on this. I guess you are right. Those who retire to the sun in Spain, mostly want the best of both worlds, that is the heat and the cheaper living in Spain, but with full pension rights and the ability to return to the UK if things get tough healthwise or whatever.

Dod

[servodude]

It is now of only academic interest to me but it is interesting

It was a bloody eye opener when it was raised during the settling of my FiL's estate. COVID didn't help as we were only able to help remotely.
But the idea that even though John had been in Australia over 70 years... without leaving Tasmania.. that the HMRC could even consider him under their bailiwick was frankly a bit shocking.
Not everyone over here as as long resident - which is possibly why the lawyers were "on to it" as a risk. And to be honest if it hadn't been for the pound being "a bit subdued" at the time the whole estate would have floated under the radar (he'd been in care for a couple of years and then my mother in law went shortly before him so we'd just offloaded the family home to support his care)
It might be very different for other places.. but given the tax treaty Australia has with the UK and how common the circumstances are I'm planning on getting my ducks in a row.
If I do eventually end up back in blighty - the kids can deal with it then...

[Tara]

It is now of only academic interest to me but it is interesting

It was a bloody eye opener when it was raised during the settling of my FiL's estate. COVID didn't help as we were only able to help remotely.
But the idea that even though John had been in Australia over 70 years... without leaving Tasmania.. that the HMRC could even consider him under their bailiwick was frankly a bit shocking.
Not everyone over here as as long resident - which is possibly why the lawyers were "on to it" as a risk. And to be honest if it hadn't been for the pound being "a bit subdued" at the time the whole estate would have floated under the radar (he'd been in care for a couple of years and then my mother in law went shortly before him so we'd just offloaded the family home to support his care)
It might be very different for other places.. but given the tax treaty Australia has with the UK and how common the circumstances are I'm planning on getting my ducks in a row.
If I do eventually end up back in blighty - the kids can deal with it then...

This situation was more to the point of the original post. If HMRC are trying to take 40% of the estate of a man who has lived in Australia for over 70 years, what incentive do his family and heirs living in Australia have to send it to them?

And what can HMRC do to his family and heirs in Australia if they choose not to send 40%? What steps will HMRC take to get their money? Can HMRC do anything?

[ReformedCharacter]

And what can HMRC do to his family and heirs in Australia if they choose not to send 40%? What steps will HMRC take to get their money? Can HMRC do anything?

I suspect they can:

Assistance in Collection (AIC) agreements which allow tax authorities in other countries to collect debts on HMRC’s behalf are in place with a large number of jurisdictions around the world.

https://www.gov.uk/government/consultat ... -responses

RC

[Lootman]

It was a bloody eye opener when it was raised during the settling of my FiL's estate. COVID didn't help as we were only able to help remotely.

But the idea that even though John had been in Australia over 70 years... without leaving Tasmania.. that the HMRC could even consider him under their bailiwick was frankly a bit shocking.

I may misremember this but isn't your wife an Australian national? If so then, assuming that you pre-decease her, then your estate may pass directly to her via joint ownership. And since bequests between spouses are exempt from UK IHT, then it seems to me that you would not have the problem that your father-in-law evidently had.

Then when your wife dies the estate that she leaves to your children would not be within the scope of UK jurisdiction because she lacks UK domicile.

Assistance in Collection (AIC) agreements which allow tax authorities in other countries to collect debts on HMRC’s behalf are in place with a large number of jurisdictions around the world.

Wouldn't such collection efforts really just be a subset of the more general problem about how any person or entity in the UK can go about collecting on a debt when the debtor and his/her assets are overseas? I would have thought that in such cases the UK entity would have to present evidence of the debt to an Australian court and, assuming the demand complies with Australian law, then the collection strategies that are legal in Australia would apply.

Likewise it is the laws of Dubai that will determine if a UK collection request has validity there.

As noted before I think this is not so much merely a collection problem. But rather an identification problem. How does a UK authority know that someone who emigrated 20/70 years ago has died? And how does that UK authority value the estate without a probate process?

[Tara]

It was a bloody eye opener when it was raised during the settling of my FiL's estate. COVID didn't help as we were only able to help remotely.

But the idea that even though John had been in Australia over 70 years... without leaving Tasmania.. that the HMRC could even consider him under their bailiwick was frankly a bit shocking.

I may misremember this but isn't your wife an Australian national? If so then, assuming that you pre-decease her, then your estate may pass directly to her via joint ownership. And since bequests between spouses are exempt from UK IHT, then it seems to me that you would not have the problem that your father-in-law evidently had.

Then when your wife dies the estate that she leaves to your children would not be within the scope of UK jurisdiction because she lacks UK domicile.

Wouldn't such collection efforts really just be a subset of the more general problem about how any person or entity in the UK can go about collecting on a debt when the debtor and his/her assets are overseas? I would have thought that in such cases the UK entity would have to present evidence of the debt to an Australian court and, assuming the demand complies with Australian law, then the collection strategies that are legal in Australia would apply.

Likewise it is the laws of Dubai that will determine if a UK collection request has validity there.

As noted before I think this is not so much merely a collection problem. But rather an identification problem. How does a UK authority know that someone who emigrated 20/70 years ago has died? And how does that UK authority value the estate without a probate process?

Is there no responsibility on the beneficiaries of the estate, who live overseas, to inform HMRC that there may be a potential liability? Is there no responsibility on the executors of the estate, who live overseas, to inform HMRC?

And if the deceased, and all of his heirs and assets are located overseas, does it not then seem as though UK Inheritance Tax is effectively a voluntary tax?

[Lootman]

Is there no responsibility on the beneficiaries of the estate, who live overseas, to inform HMRC that there may be a potential liability? Is there no responsibility on the executors of the estate, who live overseas, to inform HMRC?

And if the deceased, and all of his heirs and assets are located overseas, does it not then seem as though UK Inheritance Tax is effectively a voluntary tax?

The personal liability for mistakes, omissions and fraud sits with the executor of an estate. At least in the UK - obviously I cannot speak for other countries. So if an executor distributes an estate to beneficiaries without first making creditors whole (of whom the taxman is only one example) then he/she may end up regretting it.

For that reason some executors decline to act if they feel the specific situation involves personal risk. I know that I would.

Estate beneficiaries are not held to the same standard. After all they are typically not aware of the details of a probate. They simply get a cheque in the post one day. (Exception of course if that beneficiary is also an executor, which often happens).

As to the idea that IHT is a voluntary tax, there are a number of senses in which that has been observed before. Best summed up decades ago by Roy Jenkins:

""Inheritance Tax is a voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue".

[Dod101]

Servotude has not I think gone into details about his FiL except to say that he still held a UK passport when he died and had not got an Australian passport, plus he had lived in Australia for a long time. Presumably for HMRC to attempt any claim on his estate, or even to know that he had died, he must have had some connection to the UK such as a pension, which he may or may not have had to declare to HMRC, otherwise how could they know that he had died? The OP may not want to take this further and I totally understand that but it would be interesting to know how HMRC got involved if he is prepared to say.

Dod

[servodude]

I may misremember this but isn't your wife an Australian national? If so then, assuming that you pre-decease her, then your estate may pass directly to her via joint ownership. And since bequests between spouses are exempt from UK IHT, then it seems to me that you would not have the problem that your father-in-law evidently had.

Then when your wife dies the estate that she leaves to your children would not be within the scope of UK jurisdiction because she lacks UK domicile.
Wouldn't such collection efforts really just be a subset of the more general problem about how any person or entity in the UK can go about collecting on a debt when the debtor and his/her assets are overseas? I would have thought that in such cases the UK entity would have to present evidence of the debt to an Australian court and, assuming the demand complies with Australian law, then the collection strategies that are legal in Australia would apply.

Likewise it is the laws of Dubai that will determine if a UK collection request has validity there.

As noted before I think this is not so much merely a collection problem. But rather an identification problem. How does a UK authority know that someone who emigrated 20/70 years ago has died? And how does that UK authority value the estate without a probate process?

Is there no responsibility on the beneficiaries of the estate, who live overseas, to inform HMRC that there may be a potential liability? Is there no responsibility on the executors of the estate, who live overseas, to inform HMRC?

And if the deceased, and all of his heirs and assets are located overseas, does it not then seem as though UK Inheritance Tax is effectively a voluntary tax?

Take advice from a professional (or find a board for professionals in the area )

https://news.bloombergtax.com/tax-insig ... ould-avoid

it's complicated.

HMRC will pursue any case where there is a reasonable amount of IHT at stake and the taxpayer’s submissions regarding change of domicile are considered to be weak.

it is worth noting that the normal, unlimited IHT exemption for transfers between spouses is disapplied if the donor spouse is UK domiciled and the surviving spouse is not UK domiciled.

[Dod101]

Incidentally after all that has emerged on this subject, it would tend to suggest that the answer to the original question is much less clear cut than I would have thought as the British Embassy for instance would surely almost certainly be involved one way or another and the death could easily be reported to HMRC, who would I imagine be prepared to 'have a go' at collecting its tax.

Dod

[Lootman]

it is worth noting that the normal, unlimited IHT exemption for transfers between spouses is disapplied if the donor spouse is UK domiciled and the surviving spouse is not UK domiciled.

Hmm, I'd be curious how that works in practice.

Mr X moves to Thailand in 1990 and takes up with a Thai wife, who will obviously be non-dom. All the marital assets are held jointly and, upon his death in 2020, those assets immediately vest in his wife.

The UK taxman gets wind of this somehow and sends a tax form to Mrs X, with instructions to provide all details of his estate.

Mrs X ignores this in much the same way that you or I would ignore a tax demand from the government of Iran. She has no connection with the UK and is not subject to UK law.

What happens next?

Incidentally after all that has emerged on this subject, it would tend to suggest that the answer to the original question is much less clear cut than I would have thought as the British Embassy for instance would surely almost certainly be involved one way or another and the death could easily be reported to HMRC, who would I imagine be prepared to 'have a go' at collecting its tax.

I know nothing about how British embassies work. But their intervention surely presupposes that the expat still holds a UK passport. If they no longer have one, say because they now have an Australian passport, then it is not clear what jurisdiction they have over what is now a foreign citizen.

Also, I doubt that British embassies overseas have any idea how many people in that country were born in the UK. Most people do not tell the British embassy when they arrive in a new country.

It seems to me that if the UK is really serious about collecting such monies, other than from high profile expats like Branson who are in the public domain, they would need a vast database of everyone born in the UK, and where they currently reside. How would that database be populated?

[Dod101]

it is worth noting that the normal, unlimited IHT exemption for transfers between spouses is disapplied if the donor spouse is UK domiciled and the surviving spouse is not UK domiciled.

Hmm, I'd be curious how that works in practice.

Mr X moves to Thailand in 1990 and takes up with a Thai wife, who will obviously be non-dom. All the marital assets are held jointly and, upon his death in 2020, those assets immediately vest in his wife.

The UK taxman gets wind of this somehow and sends a tax form to Mrs X, with instructions to provide all details of his estate.

Mrs X ignores this in much the same way that you or I would ignore a tax demand from the government of Iran. She has no connection with the UK and is not subject to UK law.

What happens next?

Incidentally after all that has emerged on this subject, it would tend to suggest that the answer to the original question is much less clear cut than I would have thought as the British Embassy for instance would surely almost certainly be involved one way or another and the death could easily be reported to HMRC, who would I imagine be prepared to 'have a go' at collecting its tax.

I know nothing about how British embassies work. But their intervention surely presupposes that the expat still holds a UK passport. If they no longer have one, say because they now have an Australian passport, then it is not clear what jurisdiction they have over what is now a foreign citizen.

Also, I doubt that British embassies overseas have any idea how many people in that country were born in the UK. Most people do not tell the British embassy when they arrive in a new country.

It seems to me that if the UK is really serious about collecting such monies, other than from high profile expats like Branson who are in the public domain, they would need a vast database of everyone born in the UK, and where they currently reside. How would that database be populated?

My comment re the Embassy was really referring back to the original query about the UK passport holder who died in Dubai. I would have thought that the death may have to be registered there, but maybe not. Anyway, the whole thread indicates how much of a minefield the subject of domicile is, not that it will affect me nowadays I guess.

Dod

[servodude]

Hmm, I'd be curious how that works in practice.

Mr X moves to Thailand in 1990 and takes up with a Thai wife, who will obviously be non-dom. All the marital assets are held jointly and, upon his death in 2020, those assets immediately vest in his wife.

The UK taxman gets wind of this somehow and sends a tax form to Mrs X, with instructions to provide all details of his estate.

Mrs X ignores this in much the same way that you or I would ignore a tax demand from the government of Iran. She has no connection with the UK and is not subject to UK law.

What happens next?
I know nothing about how British embassies work. But their intervention surely presupposes that the expat still holds a UK passport. If they no longer have one, say because they now have an Australian passport, then it is not clear what jurisdiction they have over what is now a foreign citizen.

Also, I doubt that British embassies overseas have any idea how many people in that country were born in the UK. Most people do not tell the British embassy when they arrive in a new country.

It seems to me that if the UK is really serious about collecting such monies, other than from high profile expats like Branson who are in the public domain, they would need a vast database of everyone born in the UK, and where they currently reside. How would that database be populated?

My comment re the Embassy was really referring back to the original query about the UK passport holder who died in Dubai. I would have thought that the death may have to be registered there, but maybe not. Anyway, the whole thread indicates how much of a minefield the subject of domicile is, not that it will affect me nowadays I guess.

Dod

Death of a "foreign national" would normally require (based on local law) that the relevant embassy or consulate is informed as part of the registration of death.
One is a "foreign national" at least until they are naturalised and become citizens (my father-in-law was a permanent resident, not an australian citizen, when he died). What I am not sure of is whether that is, in itself, sufficient to stop the info being passed on - or would they inform in the case of a "dual/poly national"? For example I have no need to renounce my UK citizenship (even though I now have Australian also) unless I decide to run for political office in Australia .... and some places do not let one renounce citizenship.

I guess there could possibly some slight risk in having three passports wrt the net for IHT (how tenacious are Ireland?) but I think that can be easily mitigated by being clear and upfront about where one is domiciled.

-sd

[Dod101]

My comment re the Embassy was really referring back to the original query about the UK passport holder who died in Dubai. I would have thought that the death may have to be registered there, but maybe not. Anyway, the whole thread indicates how much of a minefield the subject of domicile is, not that it will affect me nowadays I guess.

Dod

Death of a "foreign national" would normally require (based on local law) that the relevant embassy or consulate is informed as part of the registration of death.
One is a "foreign national" at least until they are naturalised and become citizens (my father-in-law was a permanent resident, not an australian citizen, when he died). What I am not sure of is whether that is, in itself, sufficient to stop the info being passed on - or would they inform in the case of a "dual/poly national"? For example I have no need to renounce my UK citizenship (even though I now have Australian also) unless I decide to run for political office in Australia .... and some places do not let one renounce citizenship.

I guess there could possibly some slight risk in having three passports wrt the net for IHT (how tenacious are Ireland?) but I think that can be easily mitigated by being clear and upfront about where one is domiciled.

-sd

Thanks. You have clarified my point about the role of the Embassy and they presumably pass the registration on to the UK for registration there. That would give HMRC a route in to the death of that person if they were so minded.

Dod

[Lootman]

Death of a "foreign national" would normally require (based on local law) that the relevant embassy or consulate is informed as part of the registration of death.

One is a "foreign national" at least until they are naturalised and become citizens (my father-in-law was a permanent resident, not an australian citizen, when he died). What I am not sure of is whether that is, in itself, sufficient to stop the info being passed on - or would they inform in the case of a "dual/poly national"? For example I have no need to renounce my UK citizenship (even though I now have Australian also) unless I decide to run for political office in Australia .... and some places do not let one renounce citizenship.

I guess there could possibly some slight risk in having three passports wrt the net for IHT (how tenacious are Ireland?) but I think that can be easily mitigated by being clear and upfront about where one is domiciled.

Thanks. You have clarified my point about the role of the Embassy and they presumably pass the registration on to the UK for registration there. That would give HMRC a route in to the death of that person if they were so minded.

The defining issue there seems to be whether the expat has chosen to retain a British passport. If so then the British embassy could be informed of the death by whoever is handling the administration of the deceased's affairs, triggering an inquiry into any potential IHT liability.

But if the expat retained or renewed a UK passport then it is difficult to argue that he/she has given up UK domicile anyway. That appears to argue that the checklist for successfully arguing for non-dom status includes giving up your UK passport, which of course requires the obtaining of a passport for your new country.

My takeaway from this thread is that, should I leave the UK at some future point, I'd need to be very diligent about genuinely severing all ties. And it may be possible at my relatively late stage of life that I could never successfully achieve that.

More generally there is something almost imperialistic or colonial about the idea that the UK could try and tax someone who left the country decades ago. And especially in the example I gave earlier about being married and pre-deceasing a non-dom wife. I wonder what the attitude would be in the court system of various countries around the world to a foreign government trying to impose penalties on one of their own nationals based on the value of the wealth that they had built together in that nation.

I can't help feeling that would not be a walk in the park for the UK in many countries, who would see it as an arrogant projection of extra-territorial power and a challenge to the ultimate jurisidiction of that other nation.