IHTM27187 - Foreign property: Double Taxation Conventions: procedure with non-convention countries: relief under IHTA84/S159 (2)

Where the property concerned is situated (under UK law) in the foreign country where the foreign tax has been charged, relief is due under IHTA84/S159 (2) and the credit due is equal to the foreign tax paid.

In practice, the credit cannot be more than the Inheritance Tax (IHT) attributable to the property concerned.


Bernice died in September 2002, leaving an apartment in Spain valued at £50,000. Bernice’s total estate amounts to £300,000 (there were no lifetime gifts), with total IHT payable of £20,000.

The Spanish authorities charge tax equivalent to Sterling £4,000 on the apartment on Bernice’s death.

The IHT payable on the apartment is:

£50,000 × (£20,000 ÷ £300,000) = £3,333.33

So, the double taxation credit due under IHTA84/S159 (2) is restricted to £3,333.33.