Snowfalls trigger £25 handout

What are the rules on Cold Weather Payments (ie in addition to the usual Winter Fuel Payment) for pensioners? Was the recent period of snowfalls a sufficient trigger? Do I
need to apply for the payment or is it sent
out automatically?

Harvinder Channa, information specialist in income, benefits and finance at Age Concern, says that the Cold Weather Payment is a flat-rate £25 for each consecutive period of seven days when the average temperature is 0°C or below. As you say, it is in addition to the Winter Fuel Payment, which gives up to £400 to pensioners regardless of how cold the weather is.

The recent snowfalls did trigger cold weather payments to many individuals across the UK.

You are eligible if you are entitled to Pension Credit, Income Support with a pensioner or disability premium, or income-based Jobseekers Allowance (JSA) with a pensioner or disability premium. The payments should be sent to you automatically without having to claim.

The amount of savings you have is not taken into account and cold weather payments will not affect other benefits you may be getting.

As well as qualifying pensioners, the payment is available to under-60s – for example, if you receive Child Tax Credit and it includes an individual element for a child or qualifying young person who is disabled or severely disabled.

The weekly payment is triggered when the average temperature at a specified weather station has been recorded as, or is forecast to be, 0°C or below over seven consecutive days. This must be for the area in which your home is situated.

If you think you are entitled to this benefit but didn’t receive it, contact the Pension Service on 08456 060 265 or your local Jobcentre Plus, depending on which of these pays your benefits.

Winter Fuel Payments should also be sent out automatically each year in most cases. If you are aged between 60 and 79, your household is entitled to £250. If you are aged 80 or over, the payment rises to £400 (for 2008/09). However, if you’re a man aged 60-64, you will need to make a claim because you are not of pension age. To ask about payments or to make a claim, phone the Winter Fuel Helpline: 08459 151515.

Limited gifts to non-dom wife

I’ve read a lot about the position of non-doms and income tax but what is the position with inheritance tax? I am UK domiciled but my wife is not and I am planning ahead and thinking about gifting money to her – hopefully many years before I die. What effect do our UK domicile and non-domicile statuses have?
Anne Lewis, partner in the private clients group of law firm Cripps Harries Hall, says that usually gifts of any size between husband and wife are usually exempt from inheritance tax. But in your case, if you gift money to your wife, the spouse exemption is limited to £55,000.

Unlike the IHT threshold which increases every year (and is £312,000 for the current 2008/9 tax year), the spouse exemption for gifts to non-doms hasn’t increased for 20 years . However, the £312,000 nil-rate band is also available for gifts or bequests to your wife on top of the £55,000.

You are right in thinking about gifting money to your wife as the restriction on the spouse exemption only applies on what you give to your wife and not the other way around – HM Revenue & Customs is only concerned about assets heading out of its tax net. You should also think about acquiring assets in your wife’s name. Then back this up by your wife making a will to leave the assets to you, which will be covered by the unlimited spouse exemption.

However, from what you say, you reckon you have a good chance of surviving seven years, so gifts to your wife above the £55,000 limit will fall out of the tax net.

If your wife has been resident in the UK for the last 17 out of 20 years then, regardless of her tax domicile, for IHT purposes she is deemed UK domiciled. If your wife is on the verge of being deemed UK domiciled, it may be worth delaying your gifts so that they take effect when the full spouse exemption is available.

This avoids taking the risk that you might not survive for seven years after making the gift or having to insure against the possibility of dying within seven years.

Sometimes, if your main worry is inheritance tax rather than income tax and your wife is unlikely to move back to her domicile of origin/choice on your death, she could take positive steps to show that she has acquired a UK domicile of choice, e.g. closing offshore bank accounts and including a statement in her will that she regards herself as UK domiciled.

Domicile is a complex concept, peculiar to English law, with a number of factors taken into account. The deemed domicile rules for IHT are also modified in relation to France, Italy, India and Pakistan. If there is any doubt about your wife’s domicile, get it checked out by a specialist.

The advice in this column is specific to the facts surrounding the questions posed. Neither the Financial Tims nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.