Consumers should seek advice on inheritance tax (IHT) before investing in property abroad, a firm of independent financial advisers (IFA) stated in recent days. Alex Pegley, director at Calculis, explained that tax is constructed in a different way overseas, a fact that potential buyers should take into consideration before a purchase. “They should get a feeling for what the IHT situation is in the country they’re buying in. With the UK situation, talk to a UK IFA or an accountant. But abroad, they really need to talk to the person in the country they’re buying in,” he said. Mr Pegley concluded that the only way to avoid UK IHT is to become non-domiciled, which he said is a drawn out, complicated and “night on impossible” process. Following proposals by the Conservatives to raise the IHT band to £1 million, chancellor of the exchequer Alistair Darling announced an increase in the allowance for couples to £600,000.
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