What Makes Specialties Special?

In September HMRC published revisions to its inheritance tax (IHT) manuals relating to its interpretation of where a specialty debt (a specialty) is sited.  There has been little commentary on the revisions, even though they provide certainty for some.

But first, what is a specialty?  And second, why might it be of interest to someone who is not domiciled (actual or deemed) in the UK (a non-domiciliary)?

A specialty is more usually a debt created under a deed, which is what I shall focus on. 

As a general rule, assets located in the UK are subject to UK IHT regardless of the domicile of the owner.  Non-UK situs assets are ‘excluded property’ for UK IHT purposes if owned by a non-domiciliary.  Foreign situs assets settled on trust by a non-domiciliary can be permanently excluded from IHT.