IHTM42602 | Foreign element: foreign (excluded) property

Whether foreign settled property is excluded property (IHTM04251) depends on the date of the chargeable event and the date of death of the settlor.

See the details about foreign excluded property from IHTM04271 and (IHTM27220)

Value for rate

Excluded property is not relevant property and for transfers on or after 18 November 2015 is not included for the purposes of calculating the rate of tax. Before that date the historic value of the excluded property is included for rate purposes. (IHTM42085 and IHTM42114).

Conversion to excluded property

IHTA84/S65 (7) and (8) provide that no proportionate exit charges arise if the

• property ceases to be situated in the UK and becomes excluded property, or

• UK funds are invested in exempt Government securities and become excluded property. (IHTM27250) This applies equally to investments in authorised unit trusts and open-ended investment companies or

• if Schedule A1 (IHTM04311) no longer applies

However, where property situated abroad is comprised in a settlement and is relevant property because the settlor is long-term UK resident, there will be a proportionate charge if this becomes excluded property because the settlor loses their long-term UK residence status.

Property moving between settlements

Special rules apply to assets become comprised in other settlements or deemed settlements. (IHTM42603)

Reversionary interests

Foreign reversions are covered at IHTM04286