Section 159 — Inheritance Tax Act 1984: Unilateral relief.

Unilateral relief. 159 1 Where the Board are satisfied that in any territory outside the United Kingdom (an “overseas territory”) any amount of tax imposed by reason of any disposition or other event is attributable to the value of any property, then, if—

a that tax is of a character similar to that of inheritance tax or is chargeable on or by reference to death or gifts inter vivos, and b any inheritance tax chargeable by reference to the same disposition or other event is also attributable to the value of that property, they shall allow a credit in respect of that amount (“the overseas tax”) against that inheritance tax in accordance with the following provisions.

2 Where the property is situated in the overseas territory and not in the United Kingdom, the credit shall be of an amount equal to the overseas tax.

3 Where the property—

a is situated neither in the United Kingdom nor in the overseas territory, or b is situated both in the United Kingdom and in the overseas territory, the credit shall be of an amount calculated in accordance with the following formula— A A + B × C where A is the amount of the inheritance tax , B is the overseas tax and C is whichever of A and B is the smaller.

4 Where tax is imposed in two or more overseas territories in respect of property which—

a is situated neither in the United Kingdom nor in any of those territories, or b is situated both in the United Kingdom and in each of those territories, subsection (3) above shall apply as if, in the formula there set out, B were the aggregate of the overseas tax imposed in each of those territories and C were the aggregate of all, except the largest, of A and the overseas tax imposed in each of them.

5 Where credit is allowed under subsection (2) above or section 158 above in respect of overseas tax imposed in one overseas territory, any credit under subsection (3) above in respect of overseas tax imposed in another shall be calculated as if the inheritance tax were reduced by the credit allowed under subsection (2) or section 158; and where, in the case of any overseas territory mentioned in subsection (3) or (4) above, credit is allowed against the overseas tax for tax charged in a territory in which the property is situated, the overseas tax shall be treated for the purposes of those provisions as reduced by the credit.

6 In this section references to tax imposed in an overseas territory are references to tax chargeable under the law of that territory and paid by the person liable to pay it.

7 Where relief can be given both under this section and under section 158 above, relief shall be given under whichever section provides the greater relief.