UK Law and Practice Contributed by: Roger Gherson, Alfred Gherson, Lisa Uttley and David Tipping, Gherson Solicitors
2.4 Marital Property England and Wales operate under a separate property regime: marriage does not automatically create joint or community ownership of assets and each spouse retains ownership of property held in their name. Marital property can be held jointly (in which case the survivor takes the property upon death) or as a ten - ancy in common, in which case the property passes in accordance with the will. A sole owner can transfer property without spousal consent, subject to protections for the matrimonial home and anti-avoidance provisions where statute offers some protection. However, on divorce, the court has broad discretion under the Matrimonial Causes Act 1973 to redis - tribute assets through financial provision and prop - erty adjustment orders, considering factors including needs, contributions, standard of living and the wel - fare of children, with the welfare of any child of the family under 18 being the court’s first consideration. Prenuptial and postnuptial agreements are not auto - matically binding by statute, but following a 2010 deci - sion, the court will give them decisive weight where they are freely entered into with full appreciation of their implications, unless enforcement would be unfair. 2.5 Transfer of Property The effect of a property transfer on CGT base cost in the UK depends on the type of transfer. On death, there is an automatic uplift to market value, with no CGT charge, permanently eliminat - ing all accrued gains. This includes transfers from a deceased spouse to a surviving spouse. Lifetime gifts are treated as a disposal at market val - ue, triggering a CGT charge for the donor: the donee acquires a market-value base cost. Transfers between connected persons (including fam - ily members) are also deemed to be at market value. Lifetime spousal transfers are the exception: under section 58 of the Taxation of Chargeable Gains Act
Under UK law, unilateral double tax relief is also avail - able if another country imposes a similar tax. The UK provides a tax credit for assets not situated in the UK. If the asset is situated in the other country, credit is allowed equal to the amount of tax imposed in that country in respect of that asset. If the asset is situated in a third country, the credit is calculated as a propor - tion of the total tax, in accordance with a statutory formula. Cross-border succession planning is one of the most complex challenges for UK-based international fami - lies. Since April 2025, the UK determines worldwide IHT exposure by long-term UK residence (ten of the previous 20 tax years), replacing domicile, with a ten- year “tail” after departure. With the tightening of the tax regime and an increase in taxation to some of the highest levels in 70 years, a number of individuals are leaving the UK while their dependants remain behind. Because of the complex - ity and uncertainty created by the Government, it is necessary to seek specialist advice and, unfortunate - ly, to revisit it after each budget to ensure the rules have not changed again. Double taxation is a material risk: the UK has IHT conventions with only a limited number of countries (including the US, France, Italy and Ireland) and many jurisdictions are uncovered. A key tension is between English testamentary free - dom and the forced heirship rules of civil law juris - dictions, which reserve fixed shares of the estate for children and spouses. 2.3 Forced Heirship Laws The UK does not have forced heirship laws. However, the Inheritance (Provision for Family and Dependants) Act 1975 allows certain persons (including spouses, cohabitants, children and dependants) to apply to the court for “reasonable financial provision” where the will or intestacy rules fail to provide adequately. For surviving spouses, the standard is unrestricted: for all others, it is limited to maintenance.
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