Inheritance Tax Act 1984 section 157

Non-residents' bank accounts

Section 157 provides an exemption from inheritance tax on death for balances held in foreign currency bank accounts by individuals who were neither UK resident nor long-term UK residents at the time of their death.

• Balances on qualifying foreign currency bank accounts (accounts denominated in a currency other than sterling held with a bank) are excluded from the deceased's estate for inheritance tax purposes, provided the deceased was neither UK resident nor a long-term UK resident immediately before death.
• The exemption can also apply to foreign currency accounts held by trustees of settled property in which the deceased had an interest in possession, but only if the trustees were not UK resident immediately before the beneficiary's death and the settlor meets certain conditions relating to domicile or long-term UK resident status depending on when the settlor died or whether they are still alive.
• UK residence for individuals is determined using income tax rules, but trustees of a settlement are treated as non-UK resident unless the general administration of the settlement is ordinarily carried on in the UK and a majority of the trustees (and a majority of each class, if there is more than one class) are UK resident.
• The exemption applies only on death and is subject to the rules in Schedule A1 of the Inheritance Tax Act 1984 concerning non-excluded overseas property, which may override the exemption in certain circumstances.