Inheritance Tax Act 1984 Schedule A1 paragraph 1

Introductory

Schedule A1, paragraph 1 introduces the rule that overseas property deriving its value from UK residential property cannot automatically qualify as excluded property for inheritance tax purposes.

• Overseas property is not automatically treated as excluded property simply because it is situated outside the UK.
• The exclusion from excluded property status applies where the overseas property derives value from UK residential property.
• The property loses its excluded property status if and to the extent that paragraph 2 or paragraph 3 of the Schedule applies to it.
• This rule applies to property held directly and to property held within settlements, ensuring that holding UK residential property through overseas structures does not avoid inheritance tax.