IHT—quick succession relief
Produced in partnership with Katya Vagner of PwC
IHT—quick succession relief

The following Private Client guidance note Produced in partnership with Katya Vagner of PwC provides comprehensive and up to date legal information covering:

  • IHT—quick succession relief
  • How the relief works and when it applies
  • How to calculate the relief
  • How the relief operates in relation to tax bearing or tax free legacies
  • Interaction with the reduced 36% rate of IHT
  • Planning points

Quick succession relief (QSR), which is not to be confused with taper relief, applies to a transfer of value which attracts a second inheritance tax (IHT) charge within a five-year period of the original gift or chargeable transfer. Take, for example, an individual who receives a lifetime gift (or inherits it on death) in year one in respect of which IHT is paid and in year three that recipient dies retaining the asset which now forms part of their taxable estate upon which IHT is payable. QSR serves to provide a measure of relief against the second IHT liability based on the amount of IHT paid on the first transfer and dependent on the time elapsed between the two transfers.

How the relief works and when it applies

Relief for successive charges, also referred to as QSR, is available where the value of a person’s estate is increased by a chargeable transfer (whether a lifetime transfer or one on death) made not more than five years before their death. The IHT charged on the death is reduced by a percentage of the IHT charged on the net amount received by the deceased on the first transfer.

The definition of ‘estate’ does not include excluded property, such that QSR cannot be claimed in the UK in respect of the individual's excluded property,