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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Foreign element: double test of domicile in artificial situations

Where an overseas domicile is claimed and IHTA84/S80 or S81 is in point, and it is claimed that property is excluded under IHTA84/S48 (3)(a) or IHTA84/S65 (8), you must apply a double test of domicile because of the artificial situation created. The rule appears in S82, and you may need to test the domicile of more than one person.

Where S80 applies (IHTM42231)

  • the settlor of the original trust must be domiciled outside the UK at the date when ‘the property became comprised’ in the first trust.
  • the ‘deemed’ settlor under the later trust created by S80 must be domiciled outside the UK at the later date of the ‘deemed’ trust.

Where S81 IHTA 1984 applies (IHTM42229)

  • the settlor of the original trust, and
  • the settlor of the ‘recipient’ trust,
  • must both satisfy the domicile test in relation to their own trust at the date when their settlement was made.


Consult with TG at an early stage if you believe these provisions are in point.