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HMRC internal manual

Inheritance Tax Manual

Foreign element: practice

Foreign assets

Where the settlor is domiciled in the UK, any foreign assets are included in the trust are taxed in the normal way.

DTR might be available against lifetime transfers into trust, but not on discretionary trust charges. (IHTM27185)


If the taxpayer claims that the trust is exempt or partly exempt because of the domicile of the settlor, review the appropriate schedule in the account and refer to TG as appropriate. (IHTM10685)

The next page gives some details of the impact of overseas domicile. General domicile details are at the domicile section of this manual. (IHTM13000)


If the trustees are not in the UK, refer to Litigation immediately, even though the trust itself may be a normal UK trust.


Use of foreign trusts is a very well used method of avoiding tax generally, not just inheritance tax. Discuss any suspected avoidance measures with your manager or with TG.

Review the IHT Financial and Economic Awareness intranet site for new avoidance schemes.