Expat Domicile, Nationality & Residency

Being an expatriate in a foreign country may present a few questions when it comes to writing a Will. Your nationality, domicile, and residency can mean that your wealth and assets are bound be different laws after your death.

In certain countries individuals are subject to inheritance tax, whilst in others gifting to heirs is allowed to avoid large tax implications. If you own property overseas or have stocks and shares in foreign accounts, these may be subject to different laws to money held in your U.K. account.

Your state of residency can even have influence, as certain states in participating countries are bound by Estate Tax too. With these factors in mind, as an expat, it’s essential to clarify your residency and nationality with your Will writer to understand what’s possible and what isn’t in terms of your estate after you pass.

Nationality

This is the country you were born or where your passport was issued. This means that you have a right to return to this country at any time and own bank accounts in this country, even if you aren’t living there as you are a citizen of that country. This can be beneficial when deciding where assets will be moved to after you die. If you intend to assign a large quantity of money to a friend or relative still living in your country of birth, then it may be easier, from a tax perspective, to keep the majority of this money in an account in that country. Transferring money to accounts overseas is typically subject to larger taxes.

Residency

This is the country where you live and intend to stay for the remainder of your life. Being an expat, this probably isn’t the place you were born. In regard to tax, this is a good thing, as it means that the assets held abroad may be able to be gifted to your beneficiaries. Talking to a solicitor will help you to determine how your family can receive the highest benefit from each of your assets, depending on the country they are held in. It’s worth noting though, that while you are alive, any property, stocks or shares held overseas must still be declared on your tax return. After death, the law changes slightly and may consider tax on certain assets that are held abroad null, just because those assets are not held within the country in which you reside.

Domicile

This is a legally assigned entity name for your country. You are provided with a domicile at birth and can only maintain a single domicile at a time throughout your life. However, this can change based on your circumstances. If you own a Green Card, you may be from another country, but now have a legal right to remain in the U.S. Therefore, your domicile will now be America.

Wills & estate planning

As an expat, when planning your estate and Will, you should be specific about the country that you consider your domicile. This potentially determines the amount of tax for your estate and properties in case of your sudden death. It is always changeable later on if you do decide to relocate. But if this isn’t planned into your Will and kept up to date, the tax on your estate may be calculated incorrectly.