The UK inheritance tax regime has traditionally provided that the tax exemption for spouses will not apply if the recipient spouse is not UK domiciled and instead a small threshold applied (GBP£55,000) after which tax of 40% arose. Under the announcements made in the UK Budget 2012 next year UK domiciliaries will be able to give a non-domiciled spouse GBP325,000 free of UK inheritance tax, instead of the current maximum of GBP55,000. The new cap is equal to the IHT nil rate band, to which it will be pegged into the future.
