The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Inheritance tax (IHT) does not apply to excluded property. Specifically, this means that:
excluded property does not fall into an individual’s chargeable estate for IHT on death
excluded property is not included when calculating any transfer of value made by an individual (including that arising on the termination of a qualifying interest in possession)
excluded property is not ‘relevant property’, and therefore not subject to the periodic 10-year or exit charges on trusts
liabilities relating to excluded property are not deductible for IHT purposes
There are a number of categories of excluded property, the most important of which is property situated outside the UK, owned by a non-UK domiciled individual. An individual’s potential UK inheritance tax liability will therefore depend on:
his domicile status (see the Domicile for UK inheritance tax guidance note)
the location of his property
IHTA 1984, s 6(1)
Property is located in the place determined by the rules of common law. These are known as the lex situs rules. The situs of the most common assets are summarised below:
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