Mixed domicile spouses and civil partners
Mixed domicile spouses and civil partners

The following Private Client practice note provides comprehensive and up to date legal information covering:

  • Mixed domicile spouses and civil partners
  • Limited spouse exemption—transfers before 6 April 2013
  • Limited spouse exemption—transfers after 5 April 2013
  • Limited spouse exemption—disadvantages
  • Lifetime limit
  • Gift with reservation of benefit
  • Available exemptions and reliefs
  • Nil rate band and transferable nil rate band
  • Residential nil rate band
  • Other reliefs and exemptions
  • More...

Section 18 of the Inheritance Tax Act 1984 (IHTA 1984) contains an unlimited exemption from inheritance tax (IHT) for transfers of value between spouses and civil partners, except where a UK-domiciled person makes a transfer of value to a spouse or civil partner who is not domiciled or deemed domiciled in the UK. In such cases, the exemption is limited by IHTA 1984, s 18(2).

This Practice Note discusses the limited spouse exemption as it applies to transfers of value before and after 6 April 2013, when the exemption was increased, its interaction with capital tax treaties, and some of the problems that having only a limited exemption can create. The lifetime and death domicile election for non-UK domiciled spouses and the issues that should be considered before making the election are also discussed.

For general guidance on the concepts of domicile and deemed domicile, see Practice Notes: Domicile, Deemed domicile for tax before 6 April 2017 [Archived] and Deemed domicile for tax from 6 April 2017.

Limited spouse exemption—transfers before 6 April 2013

Until 6 April 2013, the spouse exemption was limited to £55,000, which was the amount of the nil rate band (NRB) applicable as at 14 March 1983. Since then, it has become more common for spouses or civil partners to have different domiciles. Where both are domiciled outside of the UK, the spouse exemption

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