Out of the frying pan and into the fire
When taking advice on assets held in a foreign country it is important to not only to consider the impact in that jurisdiction but at home.
We are seeing more frequently that UK domiciled individuals holding US assets are often advised by their US advisers to transfer assets onto a US Living Trust during lifetime with a view to saving probate fees in the US which might otherwise arise on death.
When taking advice in such circumstances care is needed as there can be UK taxation implications of such a transfer even though the transfer is to a US trust. For example, the Finance Act 2006 restricted the value which, in most cases, can be transferred onto trust by a UK domiciled individual without incurring an immediate charge to tax.
There can also be capital gains tax implications depending upon asset values and exchange rate fluctuations can be a factor in calculating any gain and which is particularly relevant in the current economic climate.
It is therefore recommended that before implementing advice taken abroad that you also consider taking advice in the UK.