FAQs
A US person has a $15,000,000 unified exclusion (gift and estate combined), $30,000,000 for a married couple using portability, plus a $19,000 annual exclusion per recipient. The UK nil-rate band is only £325,000, so most nine-figure estates incur 40% IHT on the portion above it.
The 1980 estate and gift tax treaty coordinates domiciles and grants credits so that the same asset is not fully taxed by both countries, usually capping the combined burden at around 40% rather than 80%. It reduces double taxation; it does not remove exposure
No. Section 1202 only applies to stock in a domestic US C-corporation meeting the gross-assets test. A UK Ltd never qualifies, which is why founders eyeing a US exit often re-domicile the holding company to a US C-corp early.
Gifting removes future growth from your estate but carries over your low cost basis; holding preserves a step-up in basis at death but keeps the asset exposed to 40% estate tax. The right answer depends on expected appreciation, your health, and your liquidity, and needs modeling.
Since 6 April 2025, a long-term UK resident’s worldwide estate stays within IHT for a “tail” of three to ten years after departure, scaling with how long you were resident. Leaving does not immediately switch off UK exposure.