When it comes to planning for your death, there are a few simple questions that require answering:
What is your Estate?
Your Estate refers to everything you own. This includes all your possessions, your investments, businesses and of course any property you own.
Why do you need to think about this now?
It’s never too early to start thinking about your estate and how to pass it on, but it’s often too late. In fact, the earlier you start the easier it will be to plan. Also consider that there may be significant tax penalties for starting too late.
Do you wish to minimise tax liabilities for your beneficiaries?
Minimising the tax liability of your estate is the main benefit of efficient management. Keep in mind that the tax bill would be paid by your inheritors. If the tax burden on your estate is high, the beneficiaries may have to sell assets (such as property) to meet this cost. There are many strategies and vehicles available to lessen the tax burden on your estate.
Will your assets go to the people you choose?
There is a legal obligation in some countries known as ‘forced heirship’. This means certain people (close family and dependants in certain countries) will have a legal claim to your estate, irrelevant whether they are included in your Will or not. For some it might be the correct choice to remove this option by setting up an offshore trust in order to allow named beneficiaries on all or part of your estate.
Can you be assured of privacy?
Enshrined privacy laws in many offshore jurisdictions mean that keeping your business your own is guaranteed.
Are non-residents still liable for British inheritance tax?
It depends - the deciding factor is where you are domiciled for inheritance tax purposes according to the Revenue (HMRC). However, HMRC’s definition of domicility can be open to interpretation, and getting further advice on this could be beneficial.