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HMRC internal manual

Inheritance Tax Manual

Foreign property: locality of assets (situs): ships

‘A ship on the, high seas is deemed to be situated at its port of registry but when it comes within territorial waters this artificial situs is displaced by the actual situs’: Trustees Executors & Agency Co Ltd v IRC [1973) Ch 254.

So, on the date of a transfer of value the value of a ship is chargeable to Inheritance Tax in the UK if it is within UK territorial waters.