Cross-border inheritance tax issues
Produced in partnership with Richard Frimston, Andrew Godfrey and Patrick Malone of Russell-Cooke Solicitors
Cross-border inheritance tax issues

The following Private Client guidance note Produced in partnership with Richard Frimston, Andrew Godfrey and Patrick Malone of Russell-Cooke Solicitors provides comprehensive and up to date legal information covering:

  • Cross-border inheritance tax issues
  • Domicile and territorial scope
  • Deemed domicile
  • Excluded property trusts
  • Double tax treaties and unilateral relief
  • Liability for foreign tax
  • Liability to IHT
  • Incidence of IHT and foreign tax
  • The European dimension

This Practice Note covers UK inheritance tax (IHT) issues in cross-border situations and deals with: actual and deemed domicile; double tax treaties and unilateral relief; the liability of personal representatives (PRs) to UK IHT and foreign inheritance or estate taxes. It also briefly mentions the impact of the changes to the taxation of non-domiciled persons which took effect from 6 April 2017 on estate planning, including the use of excluded property trusts.

For the basics of IHT, see the Inheritance tax (IHT) sub-topic.

Domicile and territorial scope

The general rule for IHT purposes is that transfers of value, whether made on death or during lifetime, will be subject to IHT regardless of where the assets involved are situated (see Practice Note: IHT consequences of lifetime transfers).

However, property situated outside the UK which is beneficially owned by a person domiciled outside the UK and which is not settled property is 'excluded property'. UK authorised unit trusts and open-ended investment companies are also excluded property if the beneficial owner is domiciled outside the UK. Most UK gilts are excluded property if the beneficial owner is resident outside the UK (regardless of domicile).

Settled property situated outside the UK is excluded property unless the settlor was domiciled in the UK when the settlement was made (see Practice Note: Excluded property trusts—key events affecting IHT status).

Excluded