IHTM44055 - Pre-owned assets: exemptions: foreign element - excluded property prior to 6 April 2025
Where a Pre-owned听Asset (POA)听charge arises before 6 April 2025, property situated abroad and comprised听in a settlement was excluded听辫谤辞辫别谤迟测 if the settlor was non-domiciled at the time the property听产别肠补尘别 comprised听in the settlement.听
This meant that an individual who was non-domiciled when they created the settlement who later became domiciled or deemed domiciled听is not subject to the POA charge on foreign assets in the settlement听even if they continue to benefit from them,听because they continued听to be excluded听辫谤辞辫别谤迟测听and this is disregarded for the purposes of the POA charge FA04/Sch15/Para12(3).听听
Additions to the settlement after the settlor became UK domiciled or deemed听domiciled were not excluded听辫谤辞辫别谤迟测 and so subject to the POA charge in the usual way.听
Property which was excluded property comprised听within a听settlement听immediately听before 30 October 2024听but which would otherwise have been included in the individual鈥檚 estate under the gift with reservation provisions (GWR) will continue听to be disregarded for the purposes of the POA charge (see IHTM047061)听
In all other cases, on or after 6 April 2025, the settlor鈥檚 domicile is not relevant and the POA charge applies to听UK resident individuals - with听both UK and foreign property, including property comprised in a settlement, if the settlor is long-term UK resident听(see IHTM047061).听听
The definition for excluded property for inheritance purposes includes interests in UK unit trusts, Open-Ended Investment Companies (OEICs)听and gilts, but this is not extended to the POA charge.听听听
Holdings in UK Unit Trusts and OEICs听may, however,听be excluded听from the POA charge if they were excluded property comprised听within a settlement immediately听before 30 October 2024听and would otherwise have been included in the individual鈥檚 estate under the gift with reservation (GWR) provisions.