Paragraph 27 IHTA 1984

Before section 267A insert—

“Election to be treated as a long-term UK resident

267ZC

(1)

A person (“P”) who would not otherwise be a long-term UK resident is treated as one for the purposes of this Act at any time when an election under this section has effect.

(2)

An election under this section may be made—

(a)

if condition A or B is met, by P;

(b)

if condition B is met, by P’s personal representatives.

(3)

Condition A is that, at any time within the period of 7 years ending with the date on which the election is made, P had a spouse or civil partner who was a long-term UK resident.

(4)

Condition B is that a person (“the deceased”) dies and, at any time within the period of 7 years ending with the date of their death, the deceased was—

(a)

a long-term UK resident, and

(b)

the spouse or civil partner of P.

Further provision about elections under section 267ZC

267ZD

(1)

An election under section 267ZC—

(a)

must be made by notice in writing to HMRC, and

(b)

has effect from such date as is, in accordance with subsection (2), specified in the notice.

(2)

The date specified in a notice under subsection (1)(a) (“the specified date”) must—

(a)

be after 5 April 2025,

(b)

be within the period of 7 years ending with—

(i)

in the case of a lifetime election, the date on which the election is made;

(ii)

in the case of a death election, the date of the deceased's death, and

(c)

meet the condition in subsection (3).

(3)

The condition is that—

(a)

in the case of a lifetime election—

(i)

the person making the election was, on the specified date, married to or in a civil partnership with the spouse or civil partner, and

(ii)

the spouse or civil partner was, on the specified date, a long-term UK resident;

(b)

in the case of a death election—

(i)

the person who is, by virtue of the election, to be treated as a long-term UK resident was, on the specified date, married to or in a civil partnership with the deceased, and

(ii)

the deceased was, on the specified date, a long-term UK resident.

(4)

A death election may only be made within—

(a)

the period of 2 years beginning with the date of the deceased’s death, or

(b)

such longer period as an officer of Revenue and Customs may in the particular case allow.

(5)

Subsection (6) applies if—

(a)

an election is made under section 267ZC,

(b)

a disposition is made, or another event occurs, during the period beginning with the date on which the election first has effect and ending with the date on which the election is made, and

(c)

the effect of the election is that the disposition or event gives rise to a transfer of value.

(6)

This Act applies with the following modifications in relation to the transfer of value—

(a)

subsections (1) and (6)(c) of section 216 (delivery of accounts) have effect as if the period specified in subsection (6)(c) of that section were the period of 12 months from the end of the month in which the election is made, and

(b)

sections 226 (payment: general rules) and 233 (interest on unpaid tax) have effect as if the transfer were made at the time when the election is made.

(7)

An election under section 267ZC cannot be revoked.

(8)

If a person who made a lifetime election is, for a period of 10 successive tax years beginning after the date on which the election is made, not resident in the United Kingdom, the election ceases to have effect at the end of that period.

(9)

For the purposes of this section—

• “death election” means an election made under section 267ZC in circumstances where Condition B in subsection (4) of that section is met;

• “lifetime election” means any other election made under section 267ZC.

Subject of domicile election treated as a long-term UK resident

267ZE

(1)

This section applies where an election under section 267ZA has effect in relation to a person immediately before 6 April 2025 (whether the election was made before or after that date).

(2)

The person is treated for the purposes of this Act (so far as would not otherwise be the case)—

(a)

as being a long-term UK resident, and

(b)

as having been one at all times on and after 6 April 2025.

(3)

But if the person is not resident in the United Kingdom for a relevant lapse period beginning at any time after the election is made, subsection (2) ceases to apply to them at the end of that period.

(4)

In subsection (3) “relevant lapse period” means—

(a)

if the election was made before 30 October 2024, a period of 4 successive tax years;

(b)

if the election was made on or after that date, a period of 10 successive tax years.

Double taxation conventions operating by reference to deemed domicile

267ZF

(1)

This section applies to a case in which the application of any arrangements having effect under section 158 (double taxation conventions) depends (to any extent) on whether a person is treated as domiciled in the United Kingdom for the purposes of inheritance tax.

(2)

The person is treated as domiciled in the United Kingdom for the purposes of inheritance tax if they are a long-term UK resident.

(3)

Sections 276ZC to 267ZE (persons treated as long-term resident by virtue of election) are to be disregarded in applying this section in relation to any arrangements that are specified in an Order in Council made under section 158 of IHTA 1984 before 17 July 2013 (other than by way of amendment by an Order made on or after that date).

(4)

Nothing in this section affects the interpretation of any such arrangements as are mentioned in section 158(6) (certain pre-1975 arrangements).”