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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Savings of individuals domiciled in Channel Islands or Isle of Man

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, IHTA84/S6 (3)

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 s.326 of the Taxes Act 1988 (commonly known as Save As You Earn or SAYE - scheme).

The opening paragraph above outlines when the provisions apply, and it is important to note that

  • the exclusion applies to securities etc owned by a domiciled Islander absolutely and also to any settled securities in which he has a beneficial interest in possession, (IHTM16000)
  • the exclusion does not extend to settled securities which are held on discretionary trusts
  • the relevant domicile is that of the transferor (and not the transferee) of the securities, at the time of the transfer,
  • the deemed domicile (IHTM13024) provisions do not apply, IHTA84/S267 (2). This means that the transferor’s domicile has to be determined under general law.