Trust money transfers may negate inheritance tax

Emigrants who make money transfers to life insurance policies held in trust may avoid paying inheritance tax, according to industry experts.

Financial advisor Shelter Offshore recently warned that simply moving overseas does not alter regulations governing inheritance tax payments.

The company explained that for many UK expats, Britain is still considered their country of domicile and they are subject to its rules.

Relocating overseas does not change this fact and relatives of expats are liable for inheritance tax if assets of the deceased are worth over £325,000.

However, the advisor suggests that emigrants can avoid being stung by the tax if they make life insurance money transfers that are held in trust.

This way, when policyholders die their insurance payments are separated from their assets, meaning they can be passed on to relatives.

In other news, the Times recently urged expats to check their income tax status overseas to avoid double taxation.

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By Linsey Summers.