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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Close companies and settled property: foreign element

Bearing in mind that claims on settled property in the ‘close company’ (IHTM14851) regime under IHTA84/PartIV cases arise in their normal context and under normal charging sections it would seem that if the trusts identified above (IHTM16243) would in their own right, satisfy IHTA84/S48(3), and the close company in question, being ‘the property’, is incorporated (and therefore domiciled) outside the UK, then an apportionment will not be made.

So the trust property takes the benefit of excluded property treatment.

IHTA84/S94 (2)(b) achieves this result for lifetime transfers.

Where a company has the interest in possession as above, the position is more explicit-S48 (4). If the trust property is invested in FOTRA securities (IHTM04306), and on looking through the company to the real beneficiaries, it can be seen that those individuals qualify under S48 (4), then exemption will be given.