transfer of money from UK resident/domiciled husband to UK resident/non-domiciled wife.

[RSKUK]

Hello. If I the UK resident/domiciled husband die before my wife can I pass on all money from my estate tax free to my uk resident/non-domiciled wife? I read that the estate is tax free up to gbp 325,000 above which tax may be due. If this is indeed the case, what measures, if any could I take to change her domicile to UK ?
Thank you.

[maths]

A gift from a UK domiciled husband to a non-domiciled wife is exempt up to 325,000 (the 325,000 is an aggregation of all gifts made in lifetime from husband to wife, not just 7 years).

In addition, once this has been exhausted the net 325,000 is taxed but only at 0% (ie effectively tax free).

[maths]

"net" should read "next"

[AGoodman]

Two other little points to remember.

From her 16th year of UK residence she will be deemed domiciled in the UK, so treated as a domiciled spouse with a full exemption.

Also, if all else failed and you died first, she could then elect to be treated as deemed domiciled for IHT and so be treated as a domiciled spouse with a full exemption.

[RSKUK]

Hello maths. So, effectively you are saying i may pass on my estate up to gbp 650 000 tax free irrespective of the fact that my wife is uk res/ non dom? Thank you.

Hello AGoodman. With regard to my wife electing to be deemed domiciled after my death to avoid IHT - are HMRC likely to accept favourably my wife's request to be deemed domiciled or do they frown upon it? Or is this a totally accepted method? Thank you.

Most grateful to both contributors.

[AGoodman]

Yes (to the question directed at maths) - there is a spouse exemption of £325k plus a nil rate band of £325k).

As for the election - HMRC don't have any discretion - it is a statutory election.