IHTM27212 - Property excluded from Inheritance Tax: foreign unsettled property

IHTA84/S6 (1) - ‘Unsettled’ is a convenient description of property which is owned absolutely, and not held in a "settlement". Unsettled property which, at the time of its transfer, is situated ( IHTM27071) abroad is excluded property if the individual/transferor who owns it beneficially ( IHTM04031) is also domiciled ( IHTM13000) outside the UK at that time.

Conversely, all unsettled property beneficially owned by a UK domiciliary is within the scope of IHT, regardless of the locality of the property. If you have any doubt about whether the property concerned is "unsettled" or "settled" you should consult your Team Leader who may refer the matter to a TG.

In any case where the transferor is claimed to have been domiciled abroad at the time of the transfer, you must check the case papers to ensure that they contain appropriate information (e.g. a form IHT405).

If you do not have the information on file you must obtain it and once the information is available, you must refer the question of domicile to TG or your Team Leader (Scotland) with an appropriate memo.