Gift of overseas cash exempt for inheritance tax

Unsettled property (ie non trust property) which, at the time of its transfer, is situated abroad is excluded property for inheritance tax purposes if the transferor is also domiciled outside the UK at that time (ie it's not taken into account for inheritance tax purposes). Therefore when determining whether a lifetime transfer was excluded property for inheritance tax purposes you would firstly establish the locality of the cash transferred and the transferors domicile at the date of the gift. Any subsequent dealing with the cash (e.g. its investment in the UK) or change in the giftors domicile does not usually impact on this. The general rule is that a bank account is a debt, and under general law is situated at the branch of the bank where the account is kept. Therefore any cash that was transferred from an overseas bank account by a non UK domiciliary should be excluded property for inheritance tax purposes.