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HMRC internal manual

Inheritance Tax Manual

Foreign property: Property excluded from Inheritance Tax: foreign unsettled property

IHTA84/S6 (1) - ‘Unsettled’ is a term used to describe property which is owned absolutely, and not held in a settlement. Unsettled property that is situated (IHTM27071) abroad at the time it is transferred is excluded property if the beneficial owner (IHTM04031) is also domiciled (IHTM13000) outside the UK at that time.

On the other hand, all unsettled property beneficially owned by someone who is domiciled in the UK is chargeable to IHT, regardless of where it is located. If you are not sure whether the property concerned is unsettled or settled you should consult your manager who may refer the matter to Technical.

In any case where the taxpayer or agent claims that the transferor is domiciled abroad at the time of the transfer, you must check to make sure you have all the appropriate information.

If you do not have the information you must obtain it and then refer the question of domicile to Technical with a covering memo.