移民英國對港人來說，其中最大的一樣改變是稅制，當中包括香港已取消多年的遺產稅。基於稅率高達40%，日後留給後代的資產，超出免稅額的都要打個六折。高葉律師行（Hugill & Ip Solicitors）創始人兼合伙人葉煥信（Alfred Ip）建議，移英港人可按照自己的資產規模大小作出應對工作去為後人減省這筆開支，但必須在離港出發之前安排妥當。
Synopsis in English
When migrating to the UK, one of the biggest challenges that Hong Kong people face is the tax system – including inheritance tax. While this has been abolished in Hong Kong many years ago, the UK still charges such tax, even if some allowances and deductions are permitted.
In order to minimize the impact of such charge, it is crucial to make arrangements before moving overseas and becoming a UK tax resident. Upon death, inheritance is transferred to a person other than the spouse (including children or grandchildren) and a tax is charged above the allowance of GBP325,000. The allowance is increased to GBP500,000 in the eventuality of jointly-owned properties – e.g. if the total value of the estate is GBP1M, heirs will be asked to pay 40% of the remaining GBP500,000 to the UK government, equivalent to a hefty GBP200,000. However, if proper arrangements are made ahead and and the spousal tax exemption is used wisely, the tax allowance can be doubled so that children or other descendants who inherit the estate will be charged a lower amount. As the UK inheritance tax is transferable and spouses are not charged regardless of the amount, when the remaining spouse also passes away, heirs can claim the unused allowance from the first deceased, making the maximum allowance be equivalent to a maximum GBP1M and greatly alleviating the overall tax burden.
The UK levies taxes on global assets so even the value of overseas properties and assets will be calculated. Thus, individuals who choose to take advantage of the BN(o) passport immigration route ought to make careful wealth, estate and tax planning before moving their resident status overseas. Once they move, many issues become very difficult or even impossible to deal with.
One of the most cost-effective ways to cushion inheritance tax liability is to get a life insurance policy, which can be used by heirs to receive a lumpsum of money after death to cover the cost of inheritance tax. Of course, this depends on the premium charged by the insurance company, the age and health conditions of the individual owning the assets and the time when the policy is signed. It is wise to look into insurance policies before leaving Hong Kong, in fact the way they are structured in the UK is rather different.
Another way to ringfence assets is to set up a Trust. It can prevent the assets to fall into the tax net that is taken into consideration for local residents. A Trust can also make sure that the relationship among family members goes on smoothly and guarantees that the trustees share the common interest of keeping assets growing. Moreover, it can shield family assets to be attacked by third parties, including spouses and other descendants. Some examples of third-party recourse include descendants filing for bankruptcy or having to pay large amounts of debts, or more commonly divorce – remember that assets included in the Trust do not form part of the matrimonial pot.
Specific considerations need to be made since the set up and management of a Trust might become somewhat expensive (generally around USD10,000 per year). This clearly depends on each individual situation, the level of wealth and the projected savings vs expenses related to a Trust. Once again, such considerations need to be made before moving away from Hong Kong, in fact UK tax residents will need to pay a 20% tax when transferring British assets to the Trust. The wealthier you are, the more chances to have the British taxman knocking on your door multiple times.
Some people might choose to transfer their assets to future generations in advance. This way surely ensures tax savings as well as eliminating the need to set up a life insurance policy or a Trust. Of course, specific conditions ought to be met. Firstly, if someone dies within seven years after transferring assets to the UK and the assets are valued more than GBP325,000, inheritance tax will still be charged. If death occurs between the first and third year after assets have been transferred, the tax rate will still be 40% – while after three years it will proportionally decrease.
When transferring assets to the next generation, something crucial is not only the tax saving component but also the fact that heirs will likely live more than seven years and that they will not forget the responsibilities that come with the asset transfer – for example continuing financially supporting parents who granted them such benefit. Another risk of transferring assets to the next generation is the eventuality that they might be impacted by divorce after receiving these assets, in fact they would become part of the matrimonial pot that they share with their spouse.
The article was originally published on MING PAO NEWS