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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.

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

Pre-1975 treaties

These include situs codes and have been made with:

1. •

   France

2. •

   India

3. •

   Italy

4. •

   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).

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