Double taxation relief is given in accordance with the terms of the relevant double taxation convention. For more information on how double taxation conventions work, go to How do DTCs work.
If you have paid tax in an overseas country and the relief is due, we will give you a credit for the tax paid overseas against the inheritance tax due in the UK on the same assets on which the overseas tax was paid. The relief will be limited to the actual amount of overseas tax paid on those assets.
Brian died on 6 May 2005, leaving an estate of £500,000. His estate included an apartment in Spain valued at £35,000 on which Spanish tax of £1,500 was paid.
Work out the inheritance tax due on Brian’s estate.
| Estate | £500,000.00
|
|
less threshold |
- £275,000.00 |
|
Total |
£225,000.00 |
|
IHT due @ 40% |
£ 90,000.00 |
Calculate the proportion of the IHT that is attributable to the Spanish apartment using the formula
The Spanish tax actually paid was £1,500, so the relief is limited
to the £1,500 actually paid.
