As more Brits head abroad to live a more relaxed life and to retire, experts fear their decisions could financially backfire if they do not create an inheritance tax migration plan, in accordance to the tax laws of their new home. Read on for details.

According to the WAY Group, inheritance tax (IHT) planning specialists, it is extremely important that Brits heading overseas plan an inheritance tax migration plan, under the regulations of their new country. If left unmanaged then Brits could lose serious money and property in the future.

“Every country has its own rules affecting IHT and the result of an altered domicile status without a tax mitigation strategy could be financially disastrous,” says Paul Wilcox of the Way Group.

“It’s vital to be aware that wherever you go and whatever tax regime you may be affected by in your new country of residence, you may still incur IHT within the UK as well, possibly on the same assets.”

Wilcox advises those moving away from the UK to plan their inheritance tax before leaving the country and all assets must be taken care of in your IHT migration plan. You should also bear in mind that many popular destinations often exclude concessions on IHT.

Turkey’s appeal to British expats for example has increased significantly however its IHT laws are highly complex and family orientated. Wilcox warns if you’re moving to Turkey and do not take expert advice then you’re in danger of facing a difficult financial battle.

“Although the UK authorities may allow ‘unilateral relief’ against any IHT paid elsewhere you may be hit with the double whammy of having to pay tax twice because of your domicile status,” explains Wilcox.

The warnings are especially important as more Brits continue to escape to new shores for a new way of living and pensioners continue to favour land overseas for their retirement.

The study predicts that a further 9.8 percent of Brits are expected to leave the country for retirement by 2010 and a whopping 3 million Brits are believed to leave by 2050.

According to the research Spain and France remain popular destinations however “IHT rules in these countries are well known to be punitive for expat Britons,” says Wilcox.

“If a couple retire to Spain to live in a jointly-owned property there will almost certainly be a very costly ISD charge (Spain’s version of IHT) upon the survivor when the first dies,” adds Wilcox.

However low cost air travel and emerging markets with affordable property has lead to larger number of countries appealing to the British audience. These include Dubai, Morocco, Bulgaria, Croatia, Cape Verde and Cyprus.

“Cyprus, with its historical links to Britain and benign tax regime, has no inheritance tax whatsoever which creates a very different scenario, although the country’s succession laws that restrict the disposal of assets after death can still lead to financial disadvantage,” adds Wilcox.

“For anyone planning to emigrate, the message is money, tickets, passport – IHT mitigation plan.”