UK Intestacy and US 401K and IRA Accounts

Hi all,

I have an estate where the deceased died intestate and is UK domiciled. The deceased had a spouse and 4 children (from a previous relationship). The deceased lived in the USA for a while but was resident in the UK for a number of years before his passing. The deceased has a 401K and IRA account in the USA, which he has designated for his spouse (and this designation appears to be binding).

I have a couple of questions:-

  1. Do the 401k and IRA accounts need to be declared on the IHT400 as foreign assets (but apply spouse exemption to these), or do I not include these as they pass outside of the estate to the spouse, due to the designation; and

  2. If they are included in the IHT400, do they form part of the spouse’s entitlement under the Intestacy Rules, or are these disregarded as they are designated to the spouse outside of the Intestacy Rules?

Even if the 401k and IRA accounts were included in the IHT400, this would still not make it a taxable estate. It is however the distribution of the estate that I want to ensure is correct (because if the 401k and IRA account are included in the spouse’s entitlement under the Intestacy Rules then the share of the deceased’s children would be greater than if they were not included).

Any advice would be greatly appreciated.

Many thanks