IHTM04380 - Value left out of account: foreign currency bank accounts
Source: gov.uk (2025-12-02)


This manual text reflects changes outlined in the Finance Bill 2025, which has not yet received Royal Assent.

IHTA84/S157 excludes from the charge on death only the balance on a ‘qualifying foreign currency account’ of certain depositors:

For deaths on or after 6 April 2025 r, the exclusion applies if the depositor was neither resident nor long-term UK resident (IHTM47000 (https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm47000)) immediately before they died.

For deaths before 6 April 2025, the exclusion applies if the depositor was neither domiciled (IHTM13000 (https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm13000)) in the UK for Inheritance Tax purposes nor resident (or ordinarily resident if the death was before 6 April 2013) here for Income Tax purposes at the time of their death.

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 interest in possession (IHTM16062 (https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm16062)) in the settled property

For deaths on or after 6 April 2025 the exclusion can only apply if the beneficiary was neither resident nor long-term UK resident (IHTM47000 (https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm47000)) immediately before they died.

For deaths before 6 April 2025, the exclusion can only apply if the beneficiary was neither domiciled (IHTM13000 (https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm13000)) in the UK for Inheritance Tax purposes nor resident (or ordinarily resident if the death was before 6 April 2013) here for Income Tax purposes at the time of their death.

In addition, and in all cases, the trustees must not be resident in UK at the time of the beneficiary’s death.

There are also conditions relating to the settlor.

If the beneficiary’s death occurred prior to 6 April 2025 then the exclusion can only apply if the settlor was not domiciled in the United Kingdom when the property became comprised in the settlement.

If the beneficiary’s death occurs on or after 25 November 2025 then the exclusion can only apply if

the settlor is living at that time and is not a long-term UK resident or

the settlor had died prior to that time and on or after 6 April 2025 and was not a long-term UK resident immediately before they died or

the settlor had died prior to that time and before 6 April 2025 and was not domiciled in the UK when the property became comprised in the settlement.

However, if the beneficiary’s death occurred between 6 April 2025 and 25 November 2025 then the exclusion is only denied if the settlor was still living and was a long-term UK resident at that time.

A “qualifying foreign currency account” is an account with a bank that is denominated in a currency other than Sterling and bank has the meaning given by section 991 of the Income Tax Act 2007. It includes

the Bank of England

subject to some exclusions, a person that has permission to accept deposits under Part 4A of Financial Services and Markets Act 2000

the European Investment Bank

an 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, unless the investment in the foreign currency account was derived from the proceeds of a disposal less than 2 years earlier and is within para 5 of Sch A1 IHTA/84 (IHTM04314 (https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm04314)).

You should refer any case of difficulty, especially if you are seeking to disallow a debit balance, to Technical.