UK Residents are subject to inheritance tax (IHT) on their UK and worldwide assets.
Non UK (and non UK Domicile individuals) are subject to inheritance tax only on UK sited assets – properties are of course a UK sited asset. From April 2017, there will be IHT charged on UK residential properties held by companies – on the death of a shareholder.
All individuals, resident or not, have a NIL inheritance tax rate band available to them. This is currently £325,000 per person and any unused portions may be transferred to the spouse. Therefore, a couple will be entitled to £650,000 free of tax. The amount subject to tax will depend on the value of the asset less any liabilities attached to the asset – e.g. a mortgage or loan. A shareholder of a company will be treated as an Individual (with £325,000 exemption) and the shareholder’s % of the property will be subject to IHT.
The inheritance tax rate is currently 40%.