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HMRC internal manual

Inheritance Tax Manual

Foreign property: locality of assets (situs): introduction

The situs of property is decided by case law, statute and occasionally double taxation treaties, agreements or conventions. The situs of an asset is important for Inheritance Tax because:

  • Being located outside the UK may cause the asset to be excluded property (IHTM27211)
  • The location of an asset determines whether or not the value of the asset receives relief under a Double Taxation Convention (DTC) (IHTM27161).

IHTA84/S158 tells us to look first at the DTC that applies to see if it contains any situs rules. If the convention does not contain situs rules we must follow the general law ruling on the assets in question.

DTCs drafted before 1975 usually contain detailed rules about situs. Those drafted after 1975 usually do not.

Any question about the situs of an asset in general law must be referred to Technical.