Inheritance Tax and Divorce UK | IHT Rules, Spouse Exemptions & Estate Planning =================================================================================== What is Inheritance Tax (IHT)? ------------------------------ Inheritance Tax (IHT) is a tax on the estate (property, money, and possessions) of someone who has died. In the UK, IHT is typically charged at 40% on estates above the £325,000 threshold. However, various exemptions and reliefs can reduce or eliminate this liability, especially for married couples and civil partners. Spouse Exemption and Domicile Rules ----------------------------------- Transfers between spouses or civil partners are generally exempt from IHT, provided both parties are UK-domiciled. If one spouse is non-domiciled, the exemption is limited to £325,000 unless the non-domiciled spouse elects to be treated as UK-domiciled. These rules are crucial during divorce, as the IHT exemption lasts as long as the marriage lasts, so up until the divorce has finalised. **The tax implications of divorce can be complex and costly. You should carefully plan the division of your assets and seek specialist advice to minimise the tax burden of your separation. If you're considering or going through a divorce, click below for a free initial consultation with one of our expert divorce solicitors.** [BOOK FREE CONSULTATION](https://vardags.com/contact "BOOK FREE CONSULTATION") Transfers ordered by the court and estate planning -------------------------------------------------- Property adjustment orders in financial remedy proceedings for the transfer of real and personal property can be made effective only from the final order of divorce. However, HMRC accepts that transfers of money, property or other assets after the final order but pursuant to court orders made in divorce are exempt from IHT, if there is no intention to confer any gratuitous benefit on the transferee. **This means that a certain amount of tax efficient estate planning is possible in the context of a divorce.** Vardags' team of top divorce lawyers delivers a bespoke legal service to HNW and UHNW individuals, their families, and businesses. About Us -------- Ayesha VardagFounder & President "A DIVORCE LAWYER WIDELY REGARDED AS ONE OF THE WORLD'S BEST" The Metro Vardags offer a unique approach to the law, specially tailored to the needs of HNW individuals. We offer City-quality representation for your divorce and family law needs. Our lawyers come from the very best universities and receive the very best training - they are determined, diligent, and dedicated to getting the best outcome... [read more](https://vardags.com/about-us) [BOOK FREE CONSULTATION](https://vardags.com/contact) Related Reads ------------- ### Inheritance law and divorce When an ex-husband or ex-wife dies, make sure you check the grant of probate or letters of... [READ MORE](https://vardags.com/family-law/inheritance-law-and-divorce "Inheritance law and divorce") Related Guides -------------- [Capital Gains Tax and Divorce UK | CGT Rules, Reliefs & 2023 Updates](https://vardags.com/law-guide/tax-implications-on-divorce/capital-gains-tax-and-divorce "Capital Gains Tax and Divorce UK | CGT Rules, Reliefs & 2023 Updates") [Income Tax Implications in Divorce Settlements | Vardags Divorce Lawyers](https://vardags.com/law-guide/tax-implications-on-divorce/income-tax-and-divorce "Income Tax Implications in Divorce Settlements | Vardags Divorce Lawyers") [Is inheritance included in a divorce settlement?](https://vardags.com/law-guide/how-the-courts-decide-a-financial-settlement/is-inheritance-included-divorce-settlement "Is inheritance included in a divorce settlement?") [Stamp Duty Land Tax and Divorce](https://vardags.com/law-guide/tax-implications-on-divorce/stamp-duty-and-divorce "Stamp Duty Land Tax and Divorce") The information on this website is intended as a guide and does not constitute legal advice. Vardags do not accept liability for any errors in the information on this website, nor any losses stemming from reliance upon the statements made herein. All articles and pages aim to reflect the legal position at time they were published, and may have been rendered obsolete by subsequent developments in the law. Should you require specialist advice, tailored to your situation, please see how Vardags can help you.