IHTM04380 - Value left out of account: foreign currency bank accounts

IHTA84/S157 excludes from the charge鈥�on death only鈥�the balance on a 鈥榪ualifying foreign currency account鈥� of certain听诲别辫辞蝉颈迟辞谤s:听

  • For deaths on or after 6 April 2025, the exclusion applies if the depositor was neither resident or听long-term UK resident (IHTM47000) immediately听before they died.听

  • For deaths before 6 April 2025, the exclusion applies if the depositor听was听neither domiciled (IHTM13000) in the UK for鈥疘nheritance Tax鈥痯urposes nor resident (or ordinarily resident鈥痠f the death was before 6 April 2013)鈥痟ere for Income Tax purposes at the time of鈥痶heir death. 听

There is a corresponding exclusion for the balance on such an account held by trustees on the death of a beneficiary who had a qualifying鈥痠nterest in possession (IHTM16062) in it:听

  • For deaths on or after 6 April 2025, the exclusion听applies if the beneficiary was neither resident nor听long-term UK resident (IHTM47000) immediately听before they died.听

  • For deaths before 6 April 2025, the exclusion听applies if the beneficiary听was neither domiciled (IHTM13000) in the UK for鈥疘nheritance Tax鈥痯urposes nor resident (or ordinarily resident鈥痠f the death was before 6 April 2013)鈥痟ere for Income Tax purposes at the time of鈥痶heir death.听

In addition,听the听trustees must not be resident in UK at the time of the beneficiary鈥檚 death听and the settlor:听

    • Is alive and is not a long-term UK resident; or听

    • Died on or after 6 April 2025 and was not a long-term UK resident at their death; or听

    • Died before听6 April 2025 and was not domiciled in the UK when the property became comprised听in the settlement.听

Under FA96/SCH37/PARA12 a qualifying account is defined as 鈥榓 foreign currency account with a bank or the Post Office鈥�. A foreign currency account is one that is denominated听in a currency other听than听Sterling and under ICTA88/S840A a 鈥榖ank鈥� means

  • the Bank of England
  • an institution authorised under the Banking Act 1987
  • a relevant European institution
  • any international organisation designated as a Bank by Treasury Order.

Where the conditions are met, the balance on the account, whether in credit or in debit should be left out of account. You should refer any case of difficulty, especially if you are seeking to disallow a debit balance, to Technical.听