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HMRC internal manual

Inheritance Tax Manual

Savings of individuals domiciled in Channel Islands or Isle of Man

IHTA84/S6 (3) says that certain savings or securities under Government sponsored schemes are excluded property (IHTM04251) if the person (IHTM04052) beneficially entitled (IHTM04031) to them is domiciled (IHTM13000) in the Channel Islands or the Isle of Man.

The securities eligible for this exclusion from the tax charge are

  • War Savings Certificates
  • National Savings Certificates, including Ulster Savings Certificates; but not National Savings Income Bonds
  • Premium Savings Bonds
  • Deposits with National Savings Bank or with a Trustee Savings Bank
  • Savings under any certified contractual savings scheme within S326 of the Taxes Act 1988 (commonly known as Save As You Earn or SAYE scheme).

Other points to note are

  • the exclusion applies not only to securities that are owned by a domiciled Islander absolutely but also to any settled securities in which they have a qualifying beneficial interest in possession (IHTM16062),
  • the exclusion does not extend to settled securities which are held on relevant property trusts (IHTM42161),
  • the relevant domicile is that of the transferor (and not the transferee) of the securities, at the time of the transfer,
  • by reason of IHTA84/S267 (2) the deemed domicile (IHTM13024) provisions do not apply. So the transferor’s domicile has to be determined under general law.