# foreign spouse inheritance tax uk



## megadiyman

My Japanese wife is not domiciled in the UK as we are temporarily living apart.
I'm living in the UK 
We intend to buy a house in the UK in joint names.
If I die, she will inherit my half of the house. 
Is she then liable for 40% tax on anything over the allowance (for non-domiciled persons) of £55,000 ?
Does she have to pay the tax in order to keep the house? There must be a lot of people who are not able to.... Do they have to sell up?


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## robnw

Is she liable: yes, for amounts over the nil rate band + 55k. 
Does she have to pay the tax: your estate usually pays the tax.
Do they have to sell up: yes, or mortgage, or rent and pay slowly. This is why people tax plan their estates, especially for a non-dom marriage where the estate is > £1m.


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## Bevdeforges

Don't know much about the tax laws in the UK, but one thing many folks do is to take out a life insurance policy in the amount of the estimated inheritance taxes. In most (many?) countries, the proceeds from a life insurance policy aren't taxed and can provide the funds for paying off the inheritance taxes so the heirs don't have to sell the property.
Cheers,
Bev


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## megadiyman

*new info*



robnw said:


> Is she liable: yes, for amounts over the nil rate band + 55k.
> Does she have to pay the tax: your estate usually pays the tax.
> Do they have to sell up: yes, or mortgage, or rent and pay slowly. This is why people tax plan their estates, especially for a non-dom marriage where the estate is > £1m.


Just discovered this on t'interweb.
hmrc.gov.uk/tiin/2012/tiin784.pdf
It appears from this that the nil rate band of £55,000 is to be put up to the standard nil rate band of £325,000. A couple of things I'm not clear about in the pdf but it certainly looks as if things are changing from April 6th 2013. Will affect a lot of people on this forum.


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## megadiyman

Thanks Bev, I've actually discovered that the laws in the UK are changing from April 6th, 2013 regarding nil rate band for non-domiciled persons.
hmrc.gov.uk/tiin/2012/tiin784.pdf


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