I understand a Non UK resident surviving spouse of a UK deceased is allowed to elect to be treated as UK domiciled for Inheritance tax purposes, which removes the tax free cap of £325,000 and allows the estate to benefit from the full spouse exemption. I believe this needs to be elected in writing.
Can anyone advise if there is a specific procedure that needs to be followed or a particular section of the IHT400 with supplementary pages completed?
Do HMRC IHT department always grant such an election or are their conditions that must be met?
Finally, other than it resulting in the surviving spouses’ worldwide assets being subject to UK Inheritance Tax on their death, are there any other consequences you think the surviving spouse should be advised of?
I’d suggest submitting with the IHT400 or (if none) by post to the HMRC IHT team. There’s no discretion; the only drawback I’m aware of is the new minimum tail of 10 years; up from 4(?) years under the prior regime.
HMRC lived in terror of opining on domicile even when the taxpayer had a legitimate expectation of its being crucial to self-assessing his or her tax liability.
As I learned mainly by recruiting from the department the evaluation was being done by just the one man or woman and perhaps their dog who had the requisite expertise.
I have not had any experience of submitting an election in the LTR era but in the domicile era HMRC were content to keep silent up front and, as ever, rely on ambushing later with whatever was the argument that then suited them and not the taxpayer. An election did not prevent them from arguing that either pouse was or was not domiciled whatever was implicit in making it.
I doubt they will want to indulge the taxpayer with a useful but deferrable exegesis of the SRT.