Oceans apart

KEY POINTS

• Inheritance tax exemption restricted.
• Gifting part of the family home.
• Interaction with capital gains tax.
• Potentially exempt transfers.

Problems may arise where the spouse of a UK domiciled individual is not domiciled in the UK.

This subject which is likely to become an increasingly common problem was highlighted in a Readers’ Forum question Thai’d-up property.

One of the respondents explained that there may be an issue with the inheritance tax solution of passing property to a younger wife where the wife was not UK domiciled.

As well as potential problems for such mixed domicile couples there are also planning opportunities arising from the non-UK domicile of one of the parties.

These may perhaps balance out some of the inheritance tax downsides that arise for couples...