Inheritance Tax Act 1984 section 173

Expenses incurred abroad

Section 173 provides for a deduction against the value of overseas property when calculating a deceased person's estate, to reflect the additional costs of dealing with property situated outside the United Kingdom.

• When valuing a deceased person's estate, an allowance can be claimed against the value of property situated outside the United Kingdom.
• The allowance covers expenses incurred in administering or realising the overseas property, but only to the extent those expenses arise because the property is situated abroad.
• The allowance is capped at 5 per cent of the value of the overseas property, even if actual qualifying expenses exceed that amount.
• Only the additional costs attributable to the foreign location of the property qualify — routine administration costs that would have been incurred regardless of where the property was situated are not included.