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HMRC internal manual

Inheritance Tax Manual

Foreign property: inscribed and registered securities: duplicate or multiple registers of non-UK companies

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

Some overseas company laws allow a shareholder to use duplicate (or multiple) share registers to record the transfer of their securities.

The South African Companies Act, for example, authorises South African companies to maintain branch registers in any foreign country. Shares can be transferred on any register, but no transfer of shares passing on death can be registered in the UK until any death duty claimed by South Africa on the shares has been paid.

Remember that some registers merely record information about transfer of securities without providing the legal basis for the transfer. These registers do not affect the locality of the security (IHTM27071)

Details of transfer arrangements given in the Stock Exchange Year-Book do not always make the position clear and, if necessary, you must ask the taxpayer to explain.

Where there are many registers the register upon which the shares would normally be dealt with in the ordinary course of business is the register that determines the situs of the security - see Treasurer of Ontario v Aberdein [1947] AC 24. If the share certificates are in the UK, one of the alternative registers is in the UK, and transfers can be effected here the shares will normally be regarded as legally situated here (Re Clark, McKechnie v Clark [1904] Ch 294.

This is only an assumption and can be rebutted by the particular circumstances of the case (see Standard Chartered Bank Ltd v IRC [1978] 1 WLR 1160). But if tax is offered on shares in a foreign company with transfer facilities in the UK, you can assume that the register in the UK is the one on which the shares would normally be dealt with in the ordinary course of business.

Cases with unusual features, or in which the official view is seriously contested, must be referred to Technical.