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HMRC internal manual

Inheritance Tax Manual

Government securities in foreign ownership: ordinary residence

In addition to beneficially owning (IHTM04031) a qualifying FOTRA gilt, (IHTM04291) the transferor, or in the case of an interest in possession (IIP) (IHTM16000) settlement, (IHTM16000) the beneficiary/beneficiaries concerned - must have been ordinary resident outside the UK. ‘Residence’ and ‘ordinary residence’ are concepts that are better known in the field of Income Tax than IHT.

In some cases the question of ordinary residence will already have been considered and decided for Income Tax purposes. Inspectors often use abbreviations – ‘R’ for resident, ‘OR’ for ordinarily resident, ‘NR’ for not resident and ‘NOR’ for not ordinarily resident. You should normally requisition the person’s tax papers to ascertain what decision, if any, was reached for Income Tax purposes. You should follow that decision unless any information provided for IHT purposes points you in a different direction. Refer to TG any case where you have any doubt or difficulty, or if your decision (whether it is based on the view adopted for Income Tax or not) is disputed by the taxpayer.