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16 October 2012
HARRIET BROWN looks at issues that arise when one spouse or civil partner is not UK-domiciled
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...
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