In a previous article, you discussed people with estates in different countries. You mentioned double taxation. What is double taxation and how can I avoid it?
Double taxation is a nuisance. The starting point of this palaver is the principle of domicile.
Let us abridge a long tale with infinite potential for tedium: the country of your domicile would have the right to tax you on your earnings and assets.
On death, the country of your domicile would apply inheritance tax to your estate irrespective of location. If you have assets in another land, that country might apply its own inheritance taxes. So far, so ugly.
Generally, you can apply to have the tax in the second jurisdiction waived.
Yes, you’re ahead of me… it’s a faff.
Some would say it was a nice problem to have.
Some would say it was a problem of your own devising.
We thus stumble wearily on to the second part of your question: ‘how can I avoid it?’ This bears a second look. The import of the question was ‘how can my estate avoid it?’ Like you, I was brought up in the belief that it was bad manners to respond to a question with another question. However, this warrants an exception: is there a good reason that you are keeping assets overseas?
Let’s recall the saying of those who say you cloaked yourself in this hassle… except if there were good grounds for keeping immovable property in another state, the soundest way to avoid your estate dealing with the palaver of double taxation is to liquidate your overseas assets and repatriate the cash to these isles.
