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HMRC internal manual

Inheritance Tax Manual

Foreign property: property excluded from Inheritance Tax: specific savings held by taxpayers in Channel Islands or Isle of Man

IHTA84/S6 (3) says that certain savings or securities under Government sponsored schemes are excluded property if the person beneficially entitled to them is domiciled (IHTM13001) in the Channel Islands or the Isle of Man.

The securities eligible for this exclusion are:

  • War Savings Certificates
  • National Savings Certificates, including Ulster Savings Certificates; but not National Savings Income Bonds
  • Premium Savings Bonds
  • Deposits with National Savings Bank or with a Trustee Savings Bank
  • Savings under any certified contractual savings scheme within TA88/S326 (commonly known as Save As You Earn or SAYE - scheme).

Other points to note are:

  • the exclusion applies not only to securities that are owned absolutely but also to any settled securities in which the owner has a beneficial interest in possession
  • the exclusion does not extend to settled securities in which there is no interest in possession, (held on discretionary trusts),
  • the relevant domicile is that of the transferor (and not the transferee) of the securities, at the time of the transfer
  • the deemed domicile provisions of IHTA84/S267 (2) do not apply. So the transferor’s domicile has to be determined under general law.