Legislation was introduced by F(No 2)A 2017, effective for all chargeable events on or after 6 April 2017, to remove the excluded property status of offshore structures to the extent that the value in them is attributable to UK residential property1. For further information on the general rules see I9.335.
For information on the other categories of excluded and exempt property for IHT see I9.311.
This article discusses further points, including loans, the two-year-tail and anti-avoidance.
Loans
In many cases an offshore company is formed to acquire a UK property and for various reasons it was often advisable that the company has no other assets apart from the residence. The structure would normally be a nominal share capital together with all other funding provided by way of shareholders loan to the company. Therefore, simply removing excluded property status from any shareholdings in the company would not bring the UK residence into charge to inheritance tax.
Sch A1 paragraph 3 therefore applies to 'relevant loans' so that the rights under the loan will
To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to Tolley+™ Research or register for a free trial
Web page updated on 17 Mar 2025 13:29