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HMRC internal manual

Inheritance Tax Manual

Foreign property: inscribed and registered securities: effectiveness of register

Remember that all UK sited assets are subject to Inheritance Tax. This includes most UK sited shares unless they are excluded property (IHTM04151)

If shares are entered on a list which does not affect the legal holding of the security(even though the list could be called a register) the location of the list does not affect the situs of the security.

In Erie Beach Co Ltd v Att Gen for Ontario [1930] AC 161, certain shares (on the view that they could, under the Ontario Companies Act, be effectively dealt with only in Ontario) were held to be situated in Ontario for the purposes of Ontario Succession Duty, although they had in fact been entered on a ‘register’ opened elsewhere.

It was explained however, in R v Williams, that the Erie Beach decision was based on the finding that the particular shares in question could be dealt with effectively in Ontario only. In this case it was explained that the decision was ‘not an authority for holding that any company subject to the Ontario Companies Act is precluded from establishing registers outside Ontario on which effective transfers can be made, and Ontario companies like other Canadian companies may establish branch registers kept by ‘transfer agents’ which are equivalent to duplicate or multiple registers’ (IHTM27125).