IHTM27186 - Foreign property: Double Taxation Conventions: Unilateral Relief: which provisions apply?

To work out whether relief is due and which provisions it is due under you will need to consider the following questions:

Is the property situated in the UK under UK law?

  • If the answer is 'yes' and the property is also situated in the foreign country under the law of that country, relief is due under IHTA84/S159(3)(b),
  • If the answer is 'yes' but the property is not situated in the foreign country under their law, no relief is due.
  • If the answer is 'no' but the property is situated in the foreign country under UK law, relief is due under IHTA84/S159(2).
  • If the answer is 'no' and the property is not situated in the foreign country under UK law, relief is due under IHTA84/S159(3)(a).

Relief should be given under IHTA84/S159 (2) rather than S159 (3)(a) where tax is paid, under an agreement between the provinces concerned:

  • in Quebec and Ontario, or Quebec and British Columbia,
  • on shares which are situated in the other province, under UK law.

The assets under consideration must have been taxed in both the UK and the foreign country.