The Government is increasing the amount a UK resident can transfer to a non-resident spouse or civil partner without being hit with an inheritance tax charge to £325,000.
Documents published alongside the Budget last week reveal plans to change the IHT treatment of transfers between UK-domiciled individuals and their non-UK domiciled spouse or civil partner.
Currently the lifetime limit on the amount that can be transferred exempt from IHT to a spouse or civil partner domiciled outside the UK is £55,000. The Government has tabled proposals to increase the cap to £325,000 from 6 April this year.
The Budget documents say: “The measure will increase the inheritance tax exempt amount that a UK-domiciled individual can transfer to their non-UK domiciled spouse or civil partner.
“The legislation will also allow individuals who are domiciled outside the UK and who have a UK-domiciled spouse or civil partner to elect to be treated as domiciled in the UK for the purposes of IHT.”
HMRC estimates the rule change will cost the exchequer around £5m a year.
Syndaxi Chartered Financial Planners managing director Robert Reid says: “This sounds like a positive development but it is likely to benefit a fairly small group of people.”