Properties in Malta were subject to UK tax

The taxpayer was the deceased’s sister and legal personal representative. Mr Falzon was born in Malta where his late parents owned properties. He inherited a one-sixth share of the properties. He died in April 2015 and HMRC determined that the Maltese properties formed part of his estate and were liable to inheritance tax.

The taxpayer appealed. She claimed that UK inheritance tax did not apply to the foreign properties. She said her brother was domiciled in Malta. He had been ‘trapped’ in the UK and should not be considered a deemed domicile despite having lived in the UK for the past 37 years. Further he was not beneficially entitled to the properties – they constituted an interest in possession in settled property and were in any event excluded property because they were situated outside the UK and the settlor was not UK domiciled when the settlement...