IHT Situs Rules UK: Where Are Assets Situated for Inheritance Tax? (2026 Guide)
UK-domiciled individuals pay IHT on worldwide assets — situs is irrelevant for them except for double tax treaty relief. For non-UK domiciliaries, only UK-situs assets are chargeable under s6 IHTA 1984. The situs of shares, bank accounts, debts, IP, and other assets is determined by specific common law rules — this guide covers all major asset classes.
Situs of Assets for IHT: Quick Reference Table
| Asset Class | Situs | Basis / Rule |
|---|---|---|
| UK land and buildings | UK | Located in the UK — always UK situs regardless of owner's domicile or the governing law of any mortgage or contract. |
| Foreign land and buildings | Where situated | Land situated outside the UK is overseas situs — outside the IHT estate of non-domiciliaries. |
| UK company shares (registered on UK register) | UK | Shares in a UK-registered company are situated where the company's share register is maintained — in the UK. This applies regardless of where the shareholder lives or where the company trades. |
| Foreign company shares (registered on foreign register) | Where company is registered | If the shares are registered on an overseas register, the situs is where that register is kept — typically the company's country of incorporation. |
| UK government gilts and securities | UK | UK government debt is UK situs. This includes ISA-held gilts, NS&I products, and Treasury bonds. |
| UK bank account balances | UK (where branch is located) | A bank debt (the bank's obligation to repay the depositor) is situated where the bank branch maintaining the account is located. A balance in a UK bank branch = UK situs. |
| Overseas bank account balances | Where the branch is located | A balance held at a Maltese, Guernsey, or Swiss bank branch is overseas situs — outside the IHT estate of non-doms. |
| Simple debts owed to the deceased | Where the debtor resides | A simple debt (e.g. personal loan, trade receivable) is situated where the debtor resides. HMRC guidance at IHTM27028 confirms this is the ordinary rule for simple contract debts. |
| Specialty debts (under seal) | Where the instrument is kept | A specialty debt — a formal written obligation under seal — is situated where the instrument is physically kept. Relevant for old-style debentures and formal deeds. |
| UK patents and registered IP | UK | Patents, registered trade marks, and registered designs registered in the UK are UK situs. Registration jurisdiction determines situs for most registered IP. |
| UK registered ships and aircraft | UK | Ships and aircraft registered in the UK are UK situs. A yacht or private jet on the UK register is in the UK estate. |
| Goodwill of a UK business | Where the business is carried on | Goodwill attaches to the place where the business is carried on — a UK business's goodwill is UK situs. |
| Partnership interests | Where the business is carried on | A partner's interest in a partnership is situated where the partnership business is carried on. If a partnership trades from the UK, the interest is UK situs. |
| Life policies (UK insurer) | UK | A life policy is a chose in action — the situs is where the insurer is located or where the policy is enforceable. UK-issued policies with a UK insurer are UK situs. |
UK Domicile vs Non-Domicile: The IHT Scope Difference
UK Domiciled (or Deemed Domiciled)
- IHT on worldwide assets at death
- Situs only relevant for DTT relief
- No benefit from overseas bank accounts or foreign shares
- Excluded property trusts not available (must have been settled while non-dom)
- Deemed domicile kicks in after 15 of 20 tax years UK-resident
Non-UK Domiciled (and Not Yet Deemed Domiciled)
- IHT only on UK-situs assets
- Overseas assets are excluded property (s6(1) IHTA 1984)
- Can settle excluded property trust to lock in non-dom status for trust assets
- UK residential property through offshore companies now within IHT (s48(3A)–(3B))
- Specialist advice essential before becoming deemed domiciled
UK IHT Double Taxation Treaties
The UK has bilateral IHT/estate tax treaties with the following countries. Where a treaty applies, it prevents the same asset being charged to full IHT by both countries:
For all other countries, unilateral relief under s159 IHTA 1984 provides credit relief for overseas taxes paid on the same asset.
Frequently Asked Questions
Why do situs rules matter for Inheritance Tax?
The situs rules determine which assets fall within the scope of UK Inheritance Tax. Under s6(1) IHTA 1984, a person who is UK-domiciled at death is charged to IHT on their entire worldwide estate — whether or not any individual asset is situated in the UK. For a non-UK domiciled individual, however, s6(1) provides that overseas assets are excluded property — not chargeable to UK IHT. The situs of each asset therefore determines whether a non-domiciliary is liable on that asset. For UK domiciliaries, situs is relevant for double tax treaty relief (bilateral IHT treaties prevent the same asset being taxed twice by two countries) and for the interaction with excluded property trusts. For non-domiciliaries, situs determines the scope of the IHT charge: a non-dom with substantial UK property is liable on those assets, while their overseas bank accounts, foreign shares, and overseas land are outside the UK IHT net.
How is the situs of shares determined for IHT?
The situs of shares is determined by where the company's share register is maintained — the place where the shares are registered. For UK companies (incorporated in England, Wales, Scotland, or Northern Ireland), the share register is kept in the UK, so the shares are UK situs. This is the case even if the company trades entirely overseas, the shareholder lives abroad, or the shares are held through a nominee or CREST account. For foreign companies (incorporated overseas), the shares are situated where the company's principal register is maintained — typically the country of incorporation. Bearer shares (where ownership transfers by physical delivery of the certificate) are an exception: these were treated as situated where the certificate is physically kept. However, bearer shares in UK companies were effectively abolished by the Small Business, Enterprise and Employment Act 2015 and are no longer issued. For AIM-quoted foreign companies or DRs (depositary receipts), the situs analysis requires careful examination of the underlying register.
How does the deemed domicile rule interact with situs for non-doms?
A non-UK domiciled individual becomes deemed UK domiciled for IHT purposes after being UK-resident for 15 of the previous 20 tax years (the '15/20 rule' under s267 IHTA 1984, as amended by Finance (No.2) Act 2017). Once deemed domiciled, the individual is treated as UK-domiciled for all IHT purposes — their worldwide assets (including overseas assets of all situs types) become chargeable to UK IHT. This fundamentally changes the situs analysis: before deemed domicile, only UK-situs assets are chargeable; after deemed domicile, situs is irrelevant for the charge (all assets are in scope). However, excluded property trusts established before the individual became deemed domiciled continue to shelter overseas assets — the trust assets remain excluded property even after deemed domicile, provided the trust was established while the individual was genuinely non-domiciled and the assets were non-UK situs at the time of settlement.
Which countries have IHT double taxation treaties with the UK?
The UK has inheritance tax double taxation treaties (Estate/Gift Tax Treaties) with a small number of countries: France (1963), India (1956), Italy (1968), Netherlands (1980), Pakistan (1957), South Africa (1979), Sweden (1980), Switzerland (1994), and the United States (1979 Convention, as amended). These treaties allocate taxing rights between the UK and the treaty partner — generally preventing the same asset being charged to IHT in both countries. The mechanism varies by treaty: some allocate by situs (the country where the asset is situated has the primary taxing right), others by domicile (the country of domicile has the right to tax worldwide assets). For the US treaty, the relief is particularly significant for UK-domiciled individuals with US assets, and for US citizens resident in the UK. Unilateral relief (s159 IHTA 1984) provides credit relief where no treaty exists — reducing the UK IHT charge by the overseas tax paid on the same asset.
How can a non-domiciliary use situs planning to reduce UK IHT?
A non-UK domiciliary (who has not yet become deemed domiciled) can reduce their UK IHT exposure by: (1) Avoiding UK-situs assets — holding investments through foreign companies or foreign bank accounts rather than directly, keeping shares on foreign registers, and avoiding UK land ownership. (2) Excluded property trusts — establishing a trust while genuinely non-domiciled and settling overseas assets into it; the trust assets remain excluded property for IHT even after the individual becomes deemed domiciled or UK-domiciled. (3) Debt structure — UK land can be acquired through offshore vehicles (though the ATED and stamp duty implications must be considered). However, from April 2017 onwards, offshore company structures holding UK residential property were brought within the scope of IHT — IHTA 1984 s48(3A)–(3B) — so this route was largely closed for residential property. Commercial property held through offshore companies remains outside the IHT estate for non-doms (the shares being overseas situs), but the 2024 Autumn Budget proposed changes that may affect this from 2025. Specialist advice is essential for any situs-based IHT planning.
Is a debt owed to a deceased UK domiciliary in the IHT estate if the debtor is overseas?
Yes — for a UK-domiciled individual, all assets worldwide are in the IHT estate regardless of situs. A debt owed by an overseas debtor is an asset of the estate. The situs of that debt (determined by where the debtor resides) is relevant only for double tax treaty purposes — to determine whether the UK or the debtor's country has the primary taxing right. In the absence of a treaty, the debt is in the UK estate and UK IHT applies at 40% above the available nil-rate band. For a non-UK domiciliary, a debt owed by an overseas debtor would be overseas situs and therefore excluded property — outside the UK IHT charge. HMRC guidance on the situs of debts is at IHTM27028 and IHTM27029.
Overseas Assets and Your UK Will
If you own overseas assets, your UK will may not automatically govern them — different jurisdictions apply their own succession laws. A well-structured UK will alongside local wills for key overseas assets is the recommended approach.
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