Inheritance Tax Act 1984 section 159

Unilateral relief

Section 159 provides unilateral relief against double taxation of inheritance tax where there is no double taxation convention with the overseas territory concerned, by allowing a credit for overseas tax paid against UK inheritance tax on the same property and event.

• Where both UK inheritance tax and a similar overseas tax arise on the same event and the same property, a credit for the overseas tax may be allowed against the UK tax, even without a double taxation agreement in place.
• If the property is situated in the overseas territory but not in the UK, the credit equals the full amount of overseas tax paid; if the property is situated in neither country or in both countries, the credit is calculated using a formula that apportions relief between the two tax charges.
• Where tax is imposed by more than one overseas territory, the formula is adjusted to take account of the aggregate overseas taxes, and any credit already given under subsection (2) or under a double taxation convention (section 158) reduces the UK tax figure used in calculating further credits.
• Where relief could be given under both this section and section 158 (double taxation conventions), the taxpayer receives whichever relief is greater; overseas tax references mean tax actually paid under the law of that territory.