Commentary

I9.201 Introduction to domicile and residence

IHT, trusts and estates

I9.201 Introduction to domicile and residence

Division I9.2     Domicile and residence

Revised by
MALCOLM GUNN CTA

For updates affecting this Division please see Part I0 Updates

Domicile and residence

I9.201 Introduction to domicile and residence

The concept of domicile is fundamental to IHT1. Property not comprised in a settlement and situated outside the UK is excluded property if it is beneficially owned by a non UK-domiciliary2. Property comprised in a settlement is excluded property if the settlor was not domiciled in the UK at the time the settlement was made3.

In addition, the domicile of a transferor or transferee, and the domicile of the persons who are beneficiaries of a settlement without an interest in possession, affect the IHT position as follows:

  1.  

    (a)     the spouse or civil partner exemption is limited (to the level of the current nil-rate band; see T7.1024) if the transferor is domiciled in the UK but the transferor's spouse or civil partner is domiciled outside the UK5, although it is possible, from 17 July 2013, for a transferee spouse or civil partner to elect to be treated as domiciled in the UK so as not to be subject to this limit6;

  2.  

    (b)     no apportionment of value of a transfer of value made by a close company is made to the participators of the company where the value is attributable to property situated outside the UK and the participators are non UK-domiciliaries7;

  3.  

    (c)     the categories of excluded and exempt property8 all require the person beneficially entitled to the

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