Hi.
Following the recent death of my Mother in the UK I became aware of UK Inheritance tax and started to investigate how it will apply in the case of a foreign domiciled spouse or Girlfriend.
Me and my Girlfriend have been together over 15 years, we are not married and spend the majority of the year apart due to my UK commitments. She has never visited the UK. When I am away I send an allowance through Western Union as "Family Support".
As things stand I will be liable to IHT on my death due to my UK property and savings.
It seems that after my death the UK tax authorities could class all my years worth of family support as "Gifts" and demand 40% IHT on the whole lot. The seven year exemption rule for gifts does not apply for gifts made to a non-UK domiciled person.
Also if we were to marry, IHT exempt transfer to my wife would be limited to the first £325,000, this would include the value of all "Gifts" made prior to our wedding.
Does anybody have experience in this area, I intend to discuss this with a UK accountant however feel that I might get better advice and different insights here.