HMRC internal manual

Inheritance Tax Manual

IHTM27161 - Foreign property: Double Taxation Conventions: introduction

Double Taxation Conventions are agreements negotiated between two fiscal authorities. Their main purpose is to provide relief to taxpayers from having to pay full tax in both countries at the same time, on the same property, on the same occasion of charge. They do this in a structured way, as set out in each individual Convention. Another purpose of a Convention is to provide rules for when the two countries should exchange information. (IHTM27163).

IHTA84/S158 gives the UK government authority to enter into a Double Taxation Convention with the government of any territory outside the United Kingdom in relation to UK Inheritance Tax and a foreign equivalent.

The UK currently has agreed Conventions under IHTA84/S158 with the following countries:

  • Republic of Ireland
  • Netherlands
  • South Africa
  • Sweden
  • United States of America
  • Switzerland
  • France
  • India
  • Italy
  • Pakistan

Details of these are contained in the Inheritance Tax Double Taxation Conventions.

Whenever you encounter a case where the deceased was domiciled (IHTM13001) in one of the convention countries or owned property in one of these countries, you must consider and apply the terms of the relevant Convention.

You need to remember that not all the countries with which we have Double Taxation Conventions will necessarily have civil partnership legislation (IHTM11032). So, you cannot automatically assume that civil partners will have the same rights as spouses. If the taxpayer or agent makes such a claim, and you do not think it applies please ask them to quote the relevant legislation and then refer the file to Technical.