If you or your spouse/civil painter are in this position you will probably know that the normal inheritance tax (IHT) exemption of an unlimited amount for transfers between you (lifetime gifts and on death) is restricted to only £55,000.

That in fact was increased from 6 April 2013 to the level of the nil rate band of £325,000 and will then increase in line in the future.

Where this is still an issue it will be possible for the recipient to elect to be treated as UK domiciled, so that all transfers from their spouse or civil partner will be exempt transfers but on the other hand it will bring all overseas assets into the IHT fold. The election only applies for this IHT treatment, and can be made at any time after marriage or registration of the civil partnership. It can apply from a chosen date from 6 April 2013 but going back no further than 7 years.

An election after a death from 6 April 2013 will be valid if made within 2 years or such longer period as HMRC may allow. This will provide plenty of flexibility, especially on a death, and with careful planning the overall IHT burden can be minimised.


Leave a comment

Filed under Accountancy & Tax Stuff

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s