Will for Dual US/UK citizen?

I am a dual US/UK citizen who has lived in the UK for over 30 years.  I have no plans to return to the States. I don't own any real estate in the US, but do have stock market investments via an American brokerage firm. 

My current Will was prepared ten years ago by an American lawyer living in London. I am concerned that it enables Pennsylvania to tax my Estate. Even though he knew that I had lived here over 17 years and had obtained British citizenship, the Will declares that I am domiciled in Pennsylvania (where my father and I were born) but "temporarily residing in the UK."  The lawyer is no longer alive, so I cannot ask him why this was done. 

To minimise taxes on my Estate, should I have an American or British Will? Should I rush out and change the current one before I am hit by the proverbial bus?

Thank you.

I am far from being an expert here but in a similar situation with after tax investments and IRAs in the USA. However I have written a new will in England with an English lawyer.  It is clear from my US and UK tax returns that I am domiciled in the UK although the will says nothing about place of domicile.

In your situation I would write a new will and remove the statement that you are still domiciled in the USA and only living temporarily in the UK.

Only a guess, but it would appear it was an attempt to navigate around UK inheritance tax rules by establishing the right of taxation of the estate to be under, perhaps, more favourable Pennsylvania inheritance tax rules, with the goal of a lower amount of taxation than under UK rules. One definition of Domicile is the desire on the part of the individual, in spite of an indefinite number of years of living abroad ("temporarily residing in the UK"), to ultimately return to Pennsylvania. Given the comments in the OP, it would not be an enviable task for the executor of the estate arguing 'Domicile' with HMRC.

Thank you for your replies.

I had a feeling that the domicile "fudge" would no longer be relevant. This clause had been in a Will from 1996, but at that time I had only lived in the UK for 8 years. When he included it in the current Will, I questioned this (because I had lived here over 17 years), but he replied that when an American citizen dies abroad, it's necessary to get paperwork from the US Embassy and therefore an American Will was preferable.

Because HMRC has the right to tax me first on annual worldwide income, I assume this will be the same when I die. I just wanted to check that there was no reason why I should have an American document.



 

TinaS’ questions have various embedded assumptions about the impact on her estate of UK and US taxes. The following initial comments may assist.

Tina has been UK resident for over 30 years. Therefore she is deemed domiciled in the UK for inheritance tax under the 15 year out of 20 rule, in the (unlikely) event that she does not have a domicile of choice in the UK. Tina is therefore liable to UK inheritance tax on her worldwide assets.

Tina is a US citizen. In common with the US approach on income tax, as a citizen she is liable to US gift taxes, again on a worldwide basis.

There is a UK US estate duty double tax treaty (in addition to the income tax treaty). The main elements of this, as relevant to Tina, are-
•   The treaty does not override the US’s taxing rights.
•   The UK will have the primary taxing rights.
•   The US is required to give credit for UK tax.

There are practical aspects that should also be considered, depending on the amounts involved.