Inheritance tax and spouses / civil partners with mixed domiciles – tax pitfalls

Many spouses and civil partners are under the impression that anything they gift to the other, whether during their lifetime or on death, is fully exempt from inheritance tax (IHT). However, there is an anomaly which can have serious IHT consequences for some couples (spouses and civil partners are referred to as ‘married couples’ and ‘spouses’ below for brevity).