The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Liability for UK inheritance tax depends on a person’s domicile. In contrast to other taxes such as income tax, capital gains tax and corporation tax, liability to IHT is not primarily determined by residence in the UK (although, a person’s domicile status may be informed by their residence status). This note explains how domicile is determined for IHT purposes and how it affects the liability to tax.
All references to spouse include a civil partner.
An individual who is UK domiciled or deemed domiciled will be subject to IHT on all their worldwide assets, while an individual who is not UK domiciled will be liable to IHT only on assets located in the UK. Non-UK assets to which an individual domiciled outside the UK is beneficially entitled are excluded property for the purposes of UK IHT and will not be included in the individual’s chargeable estate.
See the Excluded property and situs of assets guidance note.
Transfers of UK assets from a UK domiciled spouse to a non-UK domiciled spouse are chargeable to IHT once they have exceeded a lifetime limit. This is in contrast to the unlimited exemption which applies to transfers between spouses where the donee spouse is UK domiciled. The lifetime limit has been £325,000 since 6 April 2013 and it is expected to remain in line with the level of the nil rate band in the future. Non-UK domiciled spouses have the option of electing to be treated as UK domiciled, which means that they gain a total exemption on property transferred from their spouse instead of being subject to the lifetime limit.
See the Transfers to a non UK domiciled spouse or civil partner guidance note.
An individual may be domiciled in the UK under general law, or under the deemed domicile rules. Both of these sets of rules are outlined below. The deemed domicile rules were changed with effect from 6 April 2017. For a
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
What is an Age 18–25 trust?The special category of Age 18–25 trusts was introduced by FA 2006 to offer some compensation for the loss of old style accumulation and maintenance (A&M) trusts. The A&M regime offered exemption from IHT charges on trusts in favour of children and young adults up to the
VAT fuel scale chargesWhat are fuel scale charges?The VAT fuel scale charge is a simplified method that can be used by a business that funds both business and private mileage costs for employees to account for any output tax due on the private use of the vehicle. The charge was introduced to
This guidance note covers measures in place to allow taxpayers to defer VAT payments as a result of pressures faced due to the coronavirus pandemic.For an overview of the impact of coronavirus on VAT more broadly, see the Coronavirus (COVID-19) and VAT ― overview guidance note.See also the CIOT
Restriction of carry forward and carry back of trading lossesFollowing the extensive changes to the loss carry forward provisions introduced from 1 April 2017, the anti-avoidance rules restricting the offset of trading losses following a change in ownership were tightened up and extended.