Deemed domicile: professional bodies revise Q&As

CIOT, STEP, ICAEW and the Law Society have posted an updated version of their questions and answers in relation to the extension of IHT to overseas property representing UK residential property interests, to reflect comments received from HMRC in February 2020. This replaces version 2 published in May 2019.

The professional bodies have prepared these Q&As to highlight areas of uncertainty in the deemed-domicile legislation introduced with effect from 6 April 2017. Separate sets of Q&As cover the provisions on:

• trust protections;
• mixed fund cleansing;
• rebasing and adjustments to the CGT foreign capital losses election; and
• extension of IHT to overseas property representing UK residential property interests.

In relation to IHT on overseas property, HMRC has provided further comments on its approach to collateral and relevant loans in question 7 and example 5 in question 11 (collateral and double charges).

The Q&As for mixed fund cleansing and CGT rebasing are expected to be the final versions.

See Finance (No 2) Act 2017 taxation of non-UK domiciliaries.