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HMRC internal manual

Inheritance Tax Manual

Foreign settled property: identifying settled property

The expression ‘property comprised in a settlement’ in IHTA84/S48 (3) means the items of property (IHTM04030) held in the settlement (IHTM16000) at the time of the chargeable event that you are considering. In determining the locality (IHTM27071) of any particular property, therefore, you should consider the property in its current form and not its previous history.


S, when domiciled in Germany, settles some German realty and some securities then situated in the UK on X for life with remainder to Y. On X’s death - the life interest comes to an end and the settled fund consists of

  • a villa in Spain, or
  • land in the UK, or
  • a house in Spain and some English securities.With a., the villa is excluded property even though it partly represents the proceeds of what was previously UK property (the securities). The land in b. is not excluded property although it is partly derived from the German realty. In c., the house is excluded property but the securities are not.