Holdings in Open End Investment Companies (OEICs) and Authorised Unit Trusts (AUTs)
FA03/S186(1) inserted s 6(1A) into IHTA84. This makes holdings in Open End Investment Companies (OEICs) and Authorised Unit Trusts (AUTs) excluded property (IHTM27211) if they are held by an individual who is not domiciled in the UK or are comprised in a settlement that was created when the settlor was not domiciled (IHTM13000) in the UK.
An Authorised Unit Trust is defined in IHTA84/S272 as ‘a scheme which is a unit trust scheme for the purposes of the Income Tax Acts (ITA07/S1007) and in the case of which an order under Financial Services and Markets Act 2000/S243 is in force’
Open Ended Investment Companies are defined in IHTA84/S272 as ‘an open-ended investment company within the meaning given by Financial Services and Markets Act 2000/S236 which is incorporated in the United Kingdom
This only applies where the occasion of charge occurred on or after 16 October 2002.
However, this exclusion does not always apply to relevant property trusts as IHTA84/S48(3A) is excluded from IHTA84/S65(7). Any case where the transfer concerns property held in a (relevant property trust where:
- the trust was created by a settlor domiciled outside the UK, and
- the trust disposes of UK situs (IHTM27071) assets and also acquires AUTs / OEICs
must be referred to Technical Group.
There is further relevant guidance on foreign property, excluded from Inheritance Tax at IHTM27211.