188ÌåÓý

Where a person is resident, but is not a long-term UK resident ,Ìýthe POA charge only applies to property that is situated in the UK, FA04/Sch15/para12(2).ÌýÌýÌý

Prior to 6 April 2025Ìýit wasÌýa person’s domicile (taking into accountÌýthe deemed domicile rules) rather than their long-term UK residence that applied.ÌýIf not domiciled in the UKÌýthe POA charge appliedÌýonly to property situated in the UK.Ìý

ExampleÌý

Gregor, who is not a long-term UK residentÌýbut is resident in the UK, gives his French house to an offshore company which is 100% owned by him and continues to live there. This is a disposal of land, but there is no POA charge because of the exemption under FA04/Sch15/Para12(2). However Gregor owns the company shares that derive their value from the house, so he is also exempt under FA04/Sch15/Para11(1). If, after a period of time, Gregor becomes long-term UK resident, this exemption under FA04/Sch15 /Para12(2) will be lost. However, exemption under FA04/Sch15/Para11(1) (IHTM44041) is still available as Gregor’s estate includes property (the company shares) which derives its value from the relevant property.Ìý

If Gregor had given his UK house to the offshore company and continued to live there, a POA charge potentially arises. The exemption under FA04/Sch15/Para12(2) does not apply because the property is situated in the UK. However, exemption under FA04/Sch15/Para11(1) is still available as Gregor’s estate includes property (the company shares) which derives its value from the relevant property.