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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 a qualifying interest in possession (IHTM16062) the beneficiaries concerned - must satisfy the residence conditions under which the security is issued. ‘Residence’ and ‘ordinary residence’ (IHTM13025) are concepts that are better known in the field of Income Tax than Inheritance Tax.

In some cases, the question of residence or ordinary residence will already have been considered and decided for Income Tax purposes. Schedule IHT401 asks at Question 6 for information about the deceased’s residency for tax purposes and the taxpayer may support their answer with copies of correspondence with the Inspector. Inspectors sometimes use abbreviations – ‘R’ for resident, ‘OR’ for ordinarily resident, ‘NR’ for not resident and ‘NOR’ for not ordinarily resident. 

Refer to Technical 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.