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HMRC internal manual

Inheritance Tax Manual

Foreign property: specific British Government Securities: exclusion of repayment of Income Tax on exempt securities

A repayment of Income Tax relating to interest on exempt securities is also excluded from the charge to Inheritance Tax on exempt securities:

  • if an existing warrant for repayment has not been cashed at the date of the relevant chargeable event,
  • if the proceeds of an encashed warrant are held - at the date of the chargeable event - by the trustees pending distribution in the administration of the trust, or
  • if the repayment due up to the date of the chargeable event is received after the date.

A repayment that is cashed before a chargeable event, by the person beneficially entitled to the repayment, is not excluded on that event.