UK Inheritance Tax

UK inheritance tax (UK IHT) affects all who are British-domiciled, however long he or she has been away from the UK.

Assets can be transferred tax-free between British-domiciled husband and wife without limit, whether during life or on death. However, assets transferred to a non-domiciled spouse only enjoy an exempt limit of £55,000, plus the “nil rate band” of, currently £325,000. Any value transferred on death in excess of this will incur tax at 40%. Assets transferred to any other third-party benefits from the “nil rate band” currently frozen at £325,000. Transfers of values on death in excess of this sum will also incur tax at 40%.

Tax on gifts to third parties or to non domiciled spouse during one’s lifetime, in excess of the nil rate band, incur tax at 20%. Tax is potentially levied on all assets, worldwide.

Please ask us for advice in understanding and planning your UK IHT.