I am dealing with a probate application for a non-UK domiciled lady for her UK assets.
She was predeceased by her husband (also not domiciled in the UK and who, to my knowledge, never held UK assets). I understand that the deceased’s own NRB allowance is available to the extent it applies to her UK assets, but would she be able to claim TNRB? So far, I have been able to ascertain from HMRC’s manual (IHTM43042) that TNRB is available if the survivor is in the UK at their death, but have not been able to find if it remains the case if the survivor dies domiciled elsewhere. I would be grateful for any suggestion of sources that indicates one way or another.
I’ve not looked at this before so here’s a bit of a guess:
- On death, there is a transfer of value of an amount equal to the value of the estate - s4
- The value of someone’s estate on death does not included excluded property - s5(1)(b)
- Property situated outside the UK is excluded property for an individual domiciled outside the UK - pre-FA2025 version of s6(1)
- VT is “the value actually transferred by the chargeable transfer so made” - s8A - so this value does not include excluded property.
- So if there is H never had any UK assets then VT must be nil and so E in s8A is equal to the NRB.
- Then proving the negative - nowhere in s8A to s8C is there a mention of the location of either of the deceaseds’ death or their residence status at death.
- I flicked through some other bits of IHTA but can’t see anything else relevant to s8A+, other than the bits about deemed domicile / elections to be treated as domiciled.
So it looks to me that the TNRB is available. But as I say I have not looked at this before.
The phrase “dies in the UK” in IHTM43042 is most unfortunate and a rare purely textual error in the manuals. The place of death of a deceased is irrelevant.
The example makes clear that the key fact is that Soraya died domiciled in the UK. However it slightly lets the side down again in relation to Abdul by not saying that he died domiciled abroad. A deceased spouse cannot claim TRNB from a living spouse!
The example shows how to ascertain how much if any of the pre- deceased spouse’s NRB is to be regarded as used. Only their assets within charge count.
What if Soraya had died non-domiciled in the UK owning assets within charge? I cannot see from IHTA that it makes any difference.
If the first spouse dies non-domiciled a full spouse exemption will apply to any assets within charge left to the survivor regardless of the latter’s domicile, so not utilising NRB available for transfer as TRNB. But the exempted assets will be within charge on the second death if still retained. It may be preferable for the first to use a NRB DT with the survivor as an eligible beneficiary. No TRNB but the settled assets and significantly any increase in their value will be excluded property, so outside both the survivor’s death estate AND any RPT charges even if UK situate.
Under the new rules there will be no RPT charges on UK situate assets of a will trust as long as the deceased settlor was not long-term resident at death. It will be possible for such a charge to arise if the settlor is long-term resident at a later chargeable event date but it still remains impossible to change residence status after death. With Ms Reeves, however, anything is possible.
Jack Harper
I can confirm that the TNRB is indeed available if either the deceased or the survivor (or both!) is non-UK domiciled. The reasoning is as per Tigger’s post, as there is no specific restriction in the legislation. Don’t forget to ask about gifts of UK assets in the last 7 years.
The HMRC manual example seemed to state so pointedly that the survivor was domiciled in the UK at death, I thought perhaps there was a restriction I had missed in the IHTA.
Thank you very much to all for your insights and assistance.