Unilateral relief—UK IHT
Produced in partnership with Andrew Godfrey and Yousafa Hazara of Russell-Cooke Solicitors LLP
Unilateral relief—UK IHT

The following Private Client practice note produced in partnership with Andrew Godfrey and Yousafa Hazara of Russell-Cooke Solicitors LLP provides comprehensive and up to date legal information covering:

  • Unilateral relief—UK IHT
  • When does unilateral relief apply?
  • Conditions for relief
  • Situs of property
  • Amount of relief
  • Calculating the tax credit
  • Unilateral relief on lifetime transfers
  • Tax of a character similar to IHT
  • How to claim unilateral relief
  • Limitations of unilateral relief

Unilateral relief—UK IHT

Unilateral relief may be available as a credit against UK inheritance tax (IHT) where a tax of a character similar to IHT has been imposed on property in an overseas territory (ie any territory outside the UK). This is explained in the HMRC Inheritance Tax Manual at IHTM27185.

Information on individual jurisdictions can be found in the Jurisdictional guides: private client subtopic.

When does unilateral relief apply?

Unilateral relief will apply mainly in relation to territories to which double tax relief does not apply. Where a double tax treaty has been entered into between the UK and a foreign territory, double tax relief for IHT will apply. These reliefs seek to limit the payment of inheritance or estate tax on the same asset in both countries.

Double taxation may arise because:

  1. jurisdictions levy tax on the basis of varying factors (such as the residence, domicile or nationality of the deceased or of the heirs, or both or the location of assets). Some jurisdictions may apply more than one of these factors

  2. where tax is levied on the same basis, definitions can differ (such as those relating to movable and immovable property, or the location of assets)

  3. the UK has IHT treaties with only five of the EU Member States (France, Italy, Ireland, the Netherlands and Sweden), and a further five outside the EU (India, Pakistan, South

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