Offshore Assets and Isle of Man Probate Applications
Posted on August 17, 2021
← Back to Info CentreIt is quite common for individuals to hold assets in offshore bank accounts on the Isle of Man but it is very likely that upon their death Isle of Man Probate will be required to deal with those assets as part of the estate. It is important for anyone considering holding assets in any offshore bank accounts, investment accounts or as property on the Island to ensure that any Will either refers specifically to these assets or does not exclude these assets by virtue of how it is drafted. Generally, it is recommended that local advice is obtained if you hold any assets on the Island but are not domiciled here.
An Isle of Man Grant of Probate will most likely be required for any individual who wishes to deal with Manx based assets of a deceased (subject to a few exceptions). An application for a Grant of Probate will be required where the deceased left a Will or an application for a Grant of Letters of Administration will be required where the person died intestate.
The Isle of Man is a separate legal jurisdiction and not part of the United Kingdom therefore any Will which refers to United Kingdom assets does not normally include Isle of Man assets which, for the purposes of applying for Probate on the Isle of Man, means that the deceased would be considered to have died intestate (without a Will) on the Island. Importantly therefore, the rules of intestacy would apply and the Will referring to the United Kingdom assets would not be followed. In most cases, moveable assets will be distributed per the laws of the country of the deceased’s domicile and non-moveable assets will be distributed per the laws of the Isle of Man. The beneficiaries may not in those circumstances be defined by the deceased’s Will.
Quite rightly, the Isle of Man Government’s Probate Office is very strict in respect of attention to detail for any probate application which, for those who have assets on the Island, is somewhat comforting that there is a stringent process to be followed prior to the Courts allowing someone to be granted the power to administer somebody’s estate. The process and the application can present some delays in obtaining a grant, especially where those applying who are based off-island require a local address for service. If an executor or administrator of an estate wishes to apply for a Grant of Probate or Grant of Letters of Administration, they are required to have an Isle of Man address for service which often results in professionals, such as law firms, being instructed. Furthermore, specific documents are usually required where a deceased died domiciled in a foreign country including, for example, any documents in any language other than English need to be translated by a reputable official translator.
The Isle of Man does not currently have any inheritance tax payable however a sliding scale filing fee is payable to the Isle of Man Government when applying for Probate or Letters of Administration. At the date of this article, the most payable is £8,490 where the Isle of Man assets are valued at over £1million. Whilst the Isle of Man has no inheritance tax that is not to say that a beneficiary who receives money from an Isle of Man offshore account does not necessarily have to pay any tax on receipt of any such inheritance. Specific tax advice should be obtained by any persons receiving money from offshore accounts as inheritance.
This article is not legal advice; please ensure you seek specialist advice on specific situations. For more information please contact Amelia Quinn, head of the Wills and Probate team at M&P Legal ajq@mplegal.im
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