IHTM42602 - Foreign element: foreign (excluded) property
Whether foreign settled property is excluded property (IHTM04251) depends on the date of the chargeable event and the date of death of the settlor.
Value for rate
Excluded property is not relevant property and for transfers on or after 18 November 2015 is not included for the purposes of calculating the rate of tax. Before that date the historic value of the excluded property is included for rate purposes. (IHTM42085 and IHTM42114).
Conversion to excluded property
IHTA84/S65 (7) and (8) provide that no proportionate exit charges arise if the
property ceases to be situated in the UK and becomes excluded property, or
UK funds are invested in exempt Government securities and become excluded property. (IHTM27250) This applies equally to investments in authorised unit trusts and open-ended investment companies or
if Schedule A1 (IHTM04311) no longer applies
However, where property situated abroad is comprised in a settlement and is relevant property because the settlor is long-term UK resident, there will be a proportionate charge if this becomes excluded property because the settlor loses their long-term UK residence status.
Property moving between settlements
Special rules apply to assets become comprised in other settlements or deemed settlements. (IHTM42603)
Reversionary interests
Foreign reversions are covered at IHTM04286