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ARTICLE · 06 OCTOBER 2008

I Am Dying To Pay More Tax

Hunt & Hunt
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The UK citizen living and working in Australia who appointed another UK citizen living in England as his trustee, had no idea that in so doing he was exposing his estate to payment of UK death duties. Deceased estates are taxed as trusts and therefore by the location of the trustee.

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Jacqueline Burns
Jacqueline Burns
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Tax and Estate Planning E-alert

The UK citizen living and working in Australia who appointed another UK citizen living in England as his trustee, had no idea that in so doing he was exposing his estate to payment of UK death duties. Deceased estates are taxed as trusts and therefore by the location of the trustee.

Similarly, patriotism can come at a high price. Take the case of a US citizen who was resident in Australia, with Australian born children, who had not lodged a US income tax return since the 1960s when he migrated to Australia and who, for patriotic reasons, took out US citizenship for his children. It was only after his death that his family discovered the expensive consequences of his patriotism. The United States taxes on the basis of citizenship, not residence or domicile, so the estate was presented with substantial US tax bills.

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