If someone was born in uk and moved to Italy in 70’s married an Italian man and died in Italy is deemed non domiciled because she lived in Italy throughout and only returning to uk to visit family - I would say yes? If yes, then if she has a property in uk and a bank account in Uk does she receive nil rate band if tax is payable in uk on uk assets? She has assets in Italy too. Can anyone confirm procedure. As I understand from the estate assets are under £325,000 in Uk.
The nil rate band is the starting rate for IHT and applies to every individual liable to UK IHT, regardless of their domicile.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
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Although it seems probable from the basic facts given, consideration should be given to the lady’s intention before assuming that she had a domicile of choice in Italy. I recall a leading case concerned a Canadian serviceman [? 1st/2nd World War] who married a Scottish lass, evidence was that he only lived in Scotland for her and always intended to return “home” when she died. Many years later he died first but was held to have retained his domicile of origin.
Note the English view on domicile may not be followed by Italy, who may prefer another approach to inheritance and/or tax matters anyway.
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If assets in UK have aggregate value of less than £325,000 there will be no UK IHT (inheritance tax) pay as 0% applies to the first £325,000.
Likely probate will be required ie to access UK assets to enable beneficiaries to inherit them. if the deceased made a will which covers only UK assets then this will make the administrative procedures easier and less costly (as compared to position of the will covers both UK and Italian assets).
Malcolm Finney
Prima facie deceased would have acquired a non-UK (ie presumably Italian) domicile. Technically speaking if woman married an Italian domiciled man before 1 January 1974 she would have acquired an Italian domicile of dependency. If she married on or after this date this automatic domicile of dependency would not apply but prima facie she seems to have acquired a non-UK domicile of choice.
Worth taking a look at the UK/Italy inheritance tax double tax convention although it is one of the older UK treaties.
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Kevin’s post refers to IRC v Group Captain Bullock [1976] 1 WLR 1178…
Malcolm Finney
Thank you for your guidance.
I would agree with others above. As a general point be careful with the word ‘deemed’ in relation to domicile as it can cause confusion between the ‘deemed domicile’ rules (i.e. statutory tax fictions for long-term UK residents) and the law of domicile under common law (which is likely that is relevant in this situation).
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