Both countries (U.S. and UK) have intricate tax laws that come into play when you pass on your wealth, and not understanding these can result in significant tax liabilities for your heirs. For instance, while the U.S. imposes estate taxes on worldwide assets, the UK charges an inheritance tax based on domicile. Navigating this dual system can be complex but is crucial to ensure that assets are passed on in the most tax-efficient manner possible. Utilizing trusts, wills, tax-advantaged accounts, and other financial instruments effectively requires an understanding of legal and tax obligations in both jurisdictions.
Tax and legal advice is not provided by Amerity Wealth Management, LLC or its advisory representatives. Legal, tax and accounting advice must be obtained through legal and/or accounting professionals.
One of the key documents affecting UK-connected individuals in the U.S. is the U.S.-UK Tax Treaty, which aims to eliminate double taxation. While the treaty can provide some relief, it doesn't cover every aspect of estate or inheritance tax. Unfortunately, the U.S. and the UK have different definitions of domicile and residency, which can have a profound impact on your estate planning strategy. Making sense of how these rules and treaty provisions apply to your personal circumstances is vital for effective cross-border estate planning. For example, your estate planning might involve setting up trusts or entities that are treated differently for tax purposes in each country, making specialized advice critical.
Tax and legal advice is not provided by Amerity Wealth Management, LLC or its advisory representatives. Legal, tax and accounting advice must be obtained through legal and/or accounting professionals.
Given the complexities and potential pitfalls involved in cross-border estate planning, professional advice is invaluable potentially on both sides of the ponds. Legal attorneys and accountants and CPAs who specialize in international estate planning along with your Amerity Wealth advisor can help you understand the nuances and make informed decisions. Issues like differing estate and gift tax exemptions, currency considerations, we can help you develop a working toward plan that considers your entire financial picture across both countries, reducing the risk of unintended tax consequences and ensuring your wealth is transferred as seamlessly as possible to the next generation.
