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Spouse exemption for a non UK domiciled individual

Throughout this note, references to spouses include civil partners. The term ‘partner’ means both a member of a married couple and a member of a registered civil partnership.

Transfers between UK domiciled spouses are wholly exempt for the purposes of UK inheritance tax, whether made in lifetime or death. Where the deemed domicile rules in IHTA 1984, s 267 apply, the full spouse exemption also applies.

General planning using the spouse exemption is covered in the Spouse exemption from inheritance tax guidance note. Domicile is discussed in the Domicile for UK inheritance tax guidance note.

However, where the transfer is by a UK domiciled spouse to a non-UK domiciled one the exemption is capped at an amount equivalent to the nil rate band, currently £325,000. Thus, a UK domiciled spouse is able to transfer up to twice the value of the nil rate band to his