IHT for non-dom's

Can anyone advise whether the spouse exemption applies for a non-Domiciled individual leaving a UK asset (worth well in excess of the NRB) to his UK domiciled wife in his will?

Rachel Gibson
R A Savage & Co

yes it does

Simon Northcott

Yes, the only exception to the usual rule is dom -> non-dom (s.18(2)).

Andrew Goodman
Osborne Clarke LLP

My view regarding spouses/CPs is that:

Non-dom to non-dom = spouse exemption available

Dom to dom = spouse exemption available

Non-dom to dom = spouse exemption available

Dom to non-dom = spouse exemption NOT available – you get the restricted spouse exemption (£325K) and any available nil rate band.

Jill MacMahon
Thackray Williams LLP

Yes, I believe Section 18 of the IHT Act 1984 deals with this. (It is only if a UK domiciled individual leaves assets to a non-UK domicile spouse where the full spouse exemption does not apply - a £325,000 limit applies to that, and even then an irreversible election to be treated as UK domicile may be beneficial.)

Haroon Rashid
I Will Solicitors Ltd

When considering the impact of s.18(2) IHTA 1984, the following need to be borne in mind:

  •     It applies to all transfers of value from a UK spouse/civil partner to a non-UK domiciled spouse/civil partner, so that lifetime gifts will reduce the relief available on the death of the party domiciled within the UK.
  •     As with relief under s.18, generally, it cannot be applied retrospectively to gift made before the marriage/civil partnership.

Paul Saunders