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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Foreign property: Double Taxation Conventions: procedure with non-convention countries: which provisions apply?

To work out whether relief is due and which provisions it is due under you will need to consider the following questions:

Is the property situated in the UK under UK law?

  • If the answer is ‘yes’ and the property is also situated in the foreign country under the law of that country, relief is due under IHTA84/S159(3)(b),
  • If the answer is ‘yes’ but the property is not situated in the foreign country under their law, no relief is due.
  • If the answer is ‘no’ but the property is situated in the foreign country under UK law, relief is due under IHTA84/S159(2).
  • If the answer is ‘no’ and the property is not situated in the foreign country under UK law, relief is due under IHTA84/S159(3)(a).

Relief should be given under IHTA84/S159 (2) rather than S159 (3)(a) where tax is paid, under an agreement between the provinces concerned:

  • in Quebec or Ontario, or Quebec and British Columbia,
  • on shares which are situated in the other province, under UK law.

Any case where the taxpayer or agent disagrees with our view that UK law applies, should be referred to Technical.