The inheritance tax exemption for transfers between spouses/civil partners is a cornerstone of the UK inheritance tax code. There is no limit on the value that can be transferred within the scope of the exemption.
This only applies if both parties are UK domiciled however. If, like me, you are UK domiciled but your spouse is not, then the limit on transfers between spouses is currently GBP55,000. Not quite so generous.
This £55,000 limit was introduced as a result of the “conversion” of capital transfer tax to inheritance tax in 1982 and has remained the same ever so since. £55,000 may have been a reasonable amount of money in 1982. It isn’t today.
The rationale for the restriction is relatively straightforward – the limit will stop “leakage” of UK wealth outside the inheritance tax net.
Anyway, good news is at hand, George Osborne has come to the rescue. His 2013 Finance Bill will contain legislation increasing the IHT exempt amount from its current level to an as yet unspecified level.