Double tax relief

By Tolley in association with Elizabeth Norton at Russell-Cooke Solicitors

The following Trusts and Inheritance Tax guidance note by Tolley in association with Elizabeth Norton at Russell-Cooke Solicitors provides comprehensive and up to date tax information covering:

  • Double tax relief
  • Double tax treaties
  • Pre-1975 treaties
  • Post-1975 treaties
  • How to claimUnilateral relief
  • Unilateral reliefs on lifetime transfers
  • Tax of a character similar to UK IHT
  • How to claim

This guidance note is a summary of the information contained in the Double tax relief for IHT and Unilateral relief guidance notes. Those guidance notes provide more detailed information in the context of cross-border estates.

Double tax treaties

Where a double tax treaty has been entered into between the UK and a foreign territory, double tax relief for inheritance tax (IHT) will apply.

IHTA 1984, s 158

Where a double tax treaty applies, it should be considered in detail. Double tax treaties can be divided into those entered into before 1975 and more recent treaties.

Pre-1975 treaties

These include situs codes and have been made with:

  • France
  • India
  • Italy
  • Pakistan (not including Bangladesh)

They apply only to IHT imposed on death and not for lifetime chargeable transfers or IHT charged on failed potentially exempt transfers (PETs).

IHTA 1984, ss 4, 158(6)

The pre-1975 treaties provide exemptions to UK IHT rather than credits against tax. This means that the tax is exempt from being paid, rather than being calculated

More on IHT reliefs: