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HMRC internal manual

Inheritance Tax Manual

Government securities in foreign ownership: reversionary interest in FOTRA gilts

Reversionary interests (IHTM04286) in settled property (IHTM16000) are in general treated as excluded property (IHTM04251) for IHT but there are some exceptions (IHTM04281).

In a case where a reversion is not itself excluded property (e.g. because it has been purchased (IHTM04282)), any FOTRA gilts (IHTM04291) forming part of the property to which the reversion relates are not excluded from the tax charge even though the transferor/reversioner may be ordinarily resident (and domiciled) abroad. In this situation therefore your valuation of the reversion should include the exempt securities.