IHTM47070 - Long-term UK residence test: Introduction to Double Taxation Conventions
From 6 April 2025 a person鈥檚 UK Inheritance Tax position will depend on whether they are a long-term UK resident听(IHTM47000).听
A double taxation convention between the UK and a foreign country may apply if a person is in scope for UK Inheritance Tax听or its equivalent in the convention country. The UK currently has 10 double taxation conventions in place听which have been negotiated between the fiscal authority in each country. (IHTM27161).听
A double taxation convention seeks to eliminate听double taxation by assigning taxing rights to one country or the other and,听on occasions where both countries retain听their right to tax the same assets,听it听determines听which country will allow and apply a credit.听听
Where primary taxing rights cannot听be established,听a tiebreaker set out within the convention will be applied.听听
Each convention varies听in its听approach to eliminating听double taxation and some only apply听in respect of duty or taxes imposed on death whilst others also apply听for charges imposed听on听other occasions听i.e.听lifetime transfers.听听
From 6 April 2025, where a double tax convention operates听by reference to whether the UK treats a person as UK domiciled for Inheritance Tax purposes (deemed听domicile), a person will be treated as UK domiciled if they are a听long-term UK resident.听Deemed domicile is relevant to some of the double tax听conventions听(IHTM47071) but not others (IHTM47072).听
However, where a person is treated as domiciled听or long-term resident听in the UK for the purposes of Inheritance Tax because they have听made a听spousal domicile听election (IHTM13040) or a long-term听UK residence election (IHTM47031)听this will be disregarded in applying any of the existing double tax conventions.听(IHTA84/267ZF(3) and (4))听