IHTA84/S157 excludes from the charge
on death only the balance on a ‘qualifying
foreign currency account’ of a depositor who was neither
domiciled [
IHTM13000) in the UK for IHT purposes
nor resident or ordinarily resident (
IHTM04295) here for Income Tax purposes
at the time of his death. There is a corresponding exclusion for
the balance on such an account held by trustees on the death of a
beneficiary domiciled and resident outside the UK who had an
interest in possession (
IHTM16000) in it provided the settlor
was not domiciled in the UK when the settlement was made and the
trustees had no ties with the UK at the time of the
beneficiary’s death.
Under FA96/SCH37/PARA12 a qualifying account is defined as
‘a foreign currency account with a bank or the Post
Office’. A foreign currency account is one that is
denominated otherwise than in sterling and under ICTA88/S840A a
‘bank’ means
Where the conditions are met, the balance on the account,
whether in credit or in debit should be left out of account. You
should refer any case of difficulty, especially if you are seeking
to disallow a debit balance, to TG.
For deaths prior to 29 April 1996, IHTA84/S157 (5)
restricted the definition of a qualifying account to a foreign
currency account with the Bank of England, the Post Office, or an
institution authorised under the Banking Act 1987.
