The following are some brief initial comments that may be of assistance to durhamlad.
Overall, the proposed gifts should be considered under each of the following-
• UK domestic rules.
• US domestic rules.
• Double tax treaty.
I do not comment below on the US domestic rules.
For UK inheritance purposes, the key starting point is domicile. Domicile is broadly the long term home of an individual, and is separate from residence or nationality. In outline for UK IHT purposes
• Worldwide assets need to be considered if he is UK domiciled (or by extended residence, deemed domiciled)
• Only UK assets need to be considered if he is not UK domiciled.
So, for instance, if he is not UK domiciled, then a gift from say a US bank account is excluded from IHT.
There is a UK US double tax treaty on estate taxes (in addition to the treaty on income tax). It would be best approached by first establishing domicile, years of residence, nationality and so forth. The treaty has a tie-breaker test where an individual is domiciled under both countries under domestic rules. There are also rules establishing primary taxing rights and requiring the other country to give credit for estate tax paid to the other.
Some other points relating to UK IHT are –
• Durhamlad is aware of the seven years for potentially exempt transfers (ie most lifetime gifts).
• If the gifts become chargeable, the nil rate band is first set against lifetime gifts and any balance against the estate on death.
• The position of each spouse should be considered separately.
• There is commentary about gifts from joint accounts in HMRC IHT manuals at IHTM15051, which he might finding interesting.
