Gifting non-US assets to an NRA spouse

I’m an American who has lived in the U.K. for over 40 years with no US assets or bank accounts. I am interested in gifting to my British spouse, including back dating to previous tax years if possible. I have a principal residence in a London suburb and a holiday home in Cornwall and I would like to protect the value should I decide to sell either property. I know that the IRS rules are totally different from being a domestic American with a domestic spouse. I would be grateful for any advice or recommendations about where to get clear and understandable information. Thank you in advance.

Did you forget that you already posted this and got a reply some hours ago?

https://talk.uk-yankee.com/index.php?topic=100629.0

Hi Durhamlad,
Thanks for the reminder - I have replied now.  I’m literally off my feet at the moment with a broken ankle and recently out of hospital after orthopaedic surgery. I know that I accidentally posted twice as well. Must be the meds!
I know that I need to sort things out regarding the estate planning with my UKC spouse. The tax treatment of Americans abroad is appalling and so complicated.

Hi Durhamlad,
Thanks for the reminder - I have replied now.  I’m literally off my feet at the moment with a broken ankle and recently out of hospital after orthopaedic surgery. I know that I accidentally posted twice as well. Must be the meds!
I know that I need to sort things out regarding the estate planning with my UKC spouse. The tax treatment of Americans abroad is appalling and so complicated.

I have certainly been there and done that (broken ankle and strong meds that is, not the gifting question   

Wish I could help with the gifting question but have no knowledge or experience on the subject.

Get well soon.

I’m an American who has lived in the U.K. for over 40 years with no US assets or bank accounts.

I'm in the same situation.

I am interested in gifting to my British spouse, including back dating to previous tax years if possible. I have a principal residence in a London suburb and a holiday home in Cornwall and I would like to protect the value should I decide to sell either property. I know that the IRS rules are totally different from being a domestic American with a domestic spouse.

I've been searching for an answer to the problem of a foreign spouse and inheritance tax for years. Thus far, I've found no conclusive answers. I saw the following article on purchasing a home in the UK on the American Expat Financial News Journal about a year ago. It also briefly touches on other inheritance topics. Again, no conclusive answers other than seek professional  advice, and of course the author represents a firm who might give that advice.

https://americanexpatfinance.com/mortgages-property/item/903-withers-what-us-individuals-need-to-know-before-buying-a-uk-home

The UK and US have a treaty specifically on estates, in addition to the Double Tax Treaty. The US has a ~$12 million tax free amount upon death for each person. There are limits on the amount a US Citizen can gift per year to a non-USC (~$159K). How this impacts the USC's estate is still a mystery, and most other articles tend to be aimed at high net worth individuals.

The cynic in me suspects the simple answer might be there is no impact for the ordinary (non-HNW) individuals resident in the UK with no US based assets unless the IRS decides there is a significant amount of money to be collected. How much that might be is, of course, also a mystery.

Thank you for your sympathy!

Here is some of the advice that I got from a tax lawyer when I was last in the US in 2019:
“Based on our knowledge of the law and our review of the United States - United Kingdom Estate and Gift Tax Treaty, hereinafter the "Treaty," we informed you that each country has the authority to tax you on your worldwide assets. In order to prevent against double taxation of the same assets by different countries, the Treaty gives primary taxing rights to the individual's country of domicile. The Treaty requires the country of residence to provide a credit for any taxes paid to the country of domicile.

Currently, the federal estate tax exemption in the United States is $11.4 million per individual. Based on the size of your estate and the current status of the law, you will not be subject to tax liability in the United States after you pass away. Furthermore, because all of your assets are located abroad, we do not need to draft any legal documents for the disposition of your estate in the United States.”

I did not, however, ask anything about the sale of my principal residence or holiday home or gifting to my UKC spouse! So these are the outstanding issues.

Hi the OAP,

You may see my reply to Durhamlad about a consultation that I had with a US lawyer in 2019. Unfortunately the focus was only on what would happen to my estate from an IRS perspective. I didn’t ask about gifting to my UKC spouse or what would happen if I sold either my principal residence or my holiday home. I feel like I have been living in a vacuum concerning all of the adverse tax implications for Americans abroad and woke up when I reached retirement age and I could no longer cope with the complexity. I have written to my representatives in the House and the Senate with no acknowledgment or reply.