There has been much in the press recently about wealthy, and the not so wealthy, cashing in their final salary pension schemes because of the potential for saving inheritance tax.
We had a case recently where the executor had done an excellent job in preparing the preliminary work to obtain a grant of probate. He then thought he ought to consult us just in case he had missed something. All the deceased’s assets had been accurately recorded. They included a one half share in a house which the deceased shared with his son, who was the other joint owner. The executor had entered one half of the house’s value in the form without appreciating that, in these circumstances, that value could be discounted so that inheritance tax is not charged on the full one half amount.
For some reason lurking in the mists of time, woodland receives favourable inheritance tax treatment. I seem to remember that Terry Wogan was a fan.
These two concepts are very important in English law. Residence is more or less what it says – the place where a person is living. Domicile is rather more complicated – the legal jurisdiction in which is located the country that a person treats as their permanent home or lives in and has a substantial connection with. So you could be living in England but be domiciled in Scotland or vice versa. You might have a holiday home in Spain and live there most of the time but still be domiciled in England and Wales.