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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Foreign property: locality of assets (situs): land and interests in land

Immovable property is situated where it is actually located. But, different legal systems may take opposing views as to whether some types of interest in land or relating to land are movable or immovable property.

‘These differences are resolved (under Private International Law, and also by specific provision in Double Taxation Conventions where these apply) by the adoption of the view taken by the law of the country in which the land itself is situated’: Johnstone v Baker (1817), 4 Madd 474; Macdonald v Macdonald [1932) SLT (HL) 381.

Land is usually classed as immovable property, so it is generally governed by the law of the country in which it is situated. This issue may be important when deciding whether spouse or civil partner exemption (IHTM11032) applies to the property.

You should resolve any questions about ownership (for example, where joint property is involved) before considering the valuation (IHTM27041).