04: Inheritance tax (IHT)

IHT applies to all the assets of individuals who are domiciled in UK, wherever those assets are situated.  For persons who are domiciled outside UK, IHT only applies to their assets situated in UK. There are special additional domicile rules for IHT:

• An individual needs at least three years’ domicile to have been established outside UK before they acquire foreign domicile for the purposes of IHT.
• A person is treated as being domiciled in UK for the purposes of IHT if they have been resident in UK for at least 17 out of the previous 20 tax years before a transfer.

The exemption for transfers between spouses is limited to £55,000 where the transferor is domiciled in UK but the receiving spouse is not UK domiciled.

See also Inheritance Tax.Last Updated