UK resident/domicile has died; estate of £350k to non dom spouse

A UK resident/domicile person has died leaving an estate of £350k to her spouse who is non-domicile.

I have received conflicting comments / guidance but the Widower believes only the first £325,000 is exempt, and tax falls due on the surplus. I disagreed but phoned HMRC and they were clear the full spousal exemption applies but again I disagree.

My solution is:
Full IHT400 account: Box 92/93: Spouse exemption (non domicile) £325,000.
Record date and place of birth of non-domicile spouse; supply copy passport and marriage certificate / license.

Box 115: Nil rate band.

Sum exemptions = £650,000

No IHT payable.


John Cartlidge
Campion Solicitors

Yes, NRB of £325,000 plus £325,000 exemption.

Spouse exemption will only be unlimited if the spouse is deemed dom (under the new 15/20 test) but also, if the estate was greater, the spouse could elect to be treated as deemed dom. Not necessary here on these figures.

Andrew Goodman
Osborne Clarke LLP

s.18(2) Inheritance Tax Act 1984 (as currently on the UK Government website) states:

(2) If, immediately before the transfer, the transferor but not the transferor’s spouse or civil partner is domiciled in the United Kingdom the value in respect of which the transfer is exempt (calculated as a value on which no tax is chargeable) shall not exceed £55,000 less any amount previously taken into account for the purposes of the exemption conferred by this section.

However, it should be noted:

  1.  The (additional) relief is now £325,000 – it would be good if the official website could be updated to reflect this fact - and
  2.  It should be noted that the relief is a lifetime relief, and so will be reduced by any transfers of value from one spouse/civil partner to the other whilst the donor is UK domiciled (including deemed domicile) and the recipient is non-UK domiciled.

Paul Saunders

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