Beware of foreign inheritance tax

Those expats who have left the UK to live abroad less than ten years ago should be alert to the fact that inheritance tax from both countries may still be payable on any assets they hold back home and in their new place of residence.

It is important that someone with property abroad "is aware of the position in each country," say Blackadders, an independent financial advisor.

Inheritance tax is currently payable at 40 per cent of any total of property, cash and assets worth over £300,000 under UK law, however in Spain the rate can be as high as 70 per cent.

Keith Thomson, Blackadders director of investment services, warned those who have moved away that they could be forced to pay the two different taxes and that it’s not a bad idea to have "two different advisors".

"They need to make sure that they’re aware of the position in each country," he advised.

The issue of a will could also come into play and Mr Thomson recommends it is worth considering two different ones.

He said: "They also need to make sure that they’ve got wills in both countries so even if you had a holiday home over in Spain or Italy that a will is written so that the assets can be restricted just to the assets in that country, rather than assets that are also in the UK."