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HMRC internal manual

Inheritance Tax Manual

Liabilities: law relating to debts: deducting foreign debts

Debts that are owed to a person resident outside the United Kingdom and:

  • not charged on UK property, or
  • not contracted to be paid in the UK

should be deducted primarily against foreign property, IHTA84/S162 (5).

If there are debts in more than one country the debts in any one country should be set against the assets in that country, and any excess set proportionately against the assets in other foreign countries.

This instruction does not apply to funeral expenses (IHTM10371).