Occasionally shares in a company, although situated in some part
of the UK by UK law, are also treated as liable to tax in a foreign
country on the grounds, for example, that the company carries on
business there. In this circumstance, by concession the amount of
foreign tax is allowed as a deduction against the value of the
shares. This concession operates whether the company is
incorporated in the UK or elsewhere.
The concession applies in the same way where the obligation
to pay foreign tax on death falls upon the company and the company
has the right to be reimbursed by the personal representatives of
the deceased shareholder before it registers a transfer of the
shares.
The concession does not apply to cases covered by the
statutory reliefs provided for by IHTA84/S158 and IHTA84/S159. Nor
does it apply to shares that become liable to the foreign tax by
reason of the operation of a Double Taxation Convention to which
the UK is not a party.
In certain circumstances, concessionary relief against the
value of property is allowed in respect of taxes payable in the
Republic of Ireland (
IHTM28101) and in Canada (
IHTM28102).
