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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 usually treated as excluded property (IHTM04251) for Inheritance Tax but there are some exceptions (IHTM04281).

Where a reversion is not itself excluded property, for example, because it has been purchased (IHTM04282), any exempt securities (IHTM04291) that are part of the property to which the reversion relates are not excluded from the tax charge. This is the case even though the transferor or reversioner may be domiciled and ordinarily resident abroad. In this situation therefore your valuation of the reversion should include the exempt securities.