IHTM04380 - Value left out of account: foreign currency bank accounts
IHTA84/S157 excludes from the charge on death only the balance on a 鈥榪ualifying foreign currency account鈥� of a depositor who was neither domiciled (IHTM13000) in the UK for听Inheritance Tax听purposes nor resident (or ordinarily resident听if the death was before 6 April 2013)听here for Income Tax purposes at the time of听their death. There is a corresponding exclusion for the balance on such an account held by trustees on the death of a beneficiary domiciled and resident outside the UK who had a qualifying听interest in possession (IHTM16062) in it provided the settlor was not domiciled in the UK when the settlement was made and the trustees had no ties with the UK at the time of the beneficiary鈥檚 death.
Under FA96/SCH37/PARA12 a qualifying account is defined as 鈥榓 foreign currency account with a bank or the Post Office鈥�. A foreign currency account is one that is denominated听in a currency other听than听Sterling and under ICTA88/S840A a 鈥榖ank鈥� means
- the Bank of England
- an institution authorised under the Banking Act 1987
- a relevant European institution
- any international organisation designated as a Bank by Treasury Order.
Where the conditions are met, the balance on the account, whether in credit or in debit should be left out of account. You should refer any case of difficulty, especially if you are seeking to disallow a debit balance, to Technical.
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