# Estate taxes on death in uk



## jannyjam (Jul 9, 2012)

I am US citizen who has lived and worked in UK for 35 years. I own a house jointly with my UK citizen wife in the UK. On my death what are IRS implications on UK property? I have been told that IRS will want their share. How can I legally make sure that everything my wife and I have worked hard for over the years stays in the UK with her and she is not penalized for being married to a US citizen?


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## WestCoastCanadianGirl (Mar 17, 2012)

I cannot help you with this other than to suggest that you cross-post your inquiry in the USA Forum branch... the people there will likely be better able to help you.

Cheers,

Westie


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## AnAmericanInScotland (Feb 8, 2012)

jannyjam said:


> I am US citizen who has lived and worked in UK for 35 years. I own a house jointly with my UK citizen wife in the UK. On my death what are IRS implications on UK property? I have been told that IRS will want their share. How can I legally make sure that everything my wife and I have worked hard for over the years stays in the UK with her and she is not penalized for being married to a US citizen?


You might also want to try posting your question in the Expat tax sub-forum. Excellent info there, led me to understand I'm much better off taking my shoeboxes filled with paperwork to the nice accountant in Edinburgh, lol, and letting him-who-is-trained cope with getting my US retirement taxes sorted every year

Expat Tax - Expat Forum For Expats, For Moving Overseas And For Jobs Abroad


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## Bevdeforges (Nov 16, 2007)

And "poof" here we are - over in the expat tax section.

This question is actually relevant to all US citizen expats. And this is the IRS page that directs you to their resources on the subject: Estate and Gift Taxes

The big thing, however, is how the estate tax has been morphing over the years. At the moment, you don't need to file an estate tax form at all if your estate is less than about $5 million.

Publication 950 is an introduction to Estate and Gift taxes should you want to start planning ahead. It's a complicated subject and yes, you do get certain credits against any US tax due for estate and gift taxes you pay where you are resident at the time of your death.
Cheers,
Bev


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## robnw (Jul 18, 2012)

> On my death what are IRS implications on UK property? 
The IRS will seek to impose estate tax, gift and generation skip tax as normal on the whole worldwide estate, and HMRC will tax just the UK estate to Inheritance Tax... and then you can set off the UK tax paid against the USA tax on the same assets and since the UK tax is higher your estate will probably end up with nothing further to pay on those assets.

>How can I legally make sure that everything my wife and I have worked hard for over the years stays in the UK with her and she is not penalized for being married to a US citizen?

Well actually marriages between UK domiciles and US Citizens are penalised, as I suspect you're finding out. The normal total spousal exemption for transfers between spouses is not available, and instead you get a cut down allowance. The UK will tax transfers by your spouse to you at 40% after you take off her personal allowance + £55k, £370k [2012]. And the USA will tax transfers from you to your wife on amounts over $60k at various rates. Estate Tax is changing in the USA at the end of 2012. To reduce these taxes takes careful consideration of your personal circumstances, and can be done with a UK - US professional and isn't one of things regrettably that can be done DIY. If you search for "cross border planning" online you'll find the kind of firms you need.


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