Opting out of the pre-owned asset tax charge

Copyright © 2025 LexisNexis
Produced by a Tolley Personal Tax expert
Personal Tax
Guidance

Opting out of the pre-owned asset tax charge

Copyright © 2025 LexisNexis
Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
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This guidance note considers the circumstances in which an individual may wish to opt out of the pre-owned asset tax (POAT) and the how this impacts their inheritance tax position.

For discussion of the regime generally, see the Pre-owned asset tax overview guidance note.

An individual subject to pre-owned asset tax (POAT) can make an irrevocable election to opt out of the pre-owned asset tax regime in relation to a particular asset. The downside is that the asset will then form part of the estate for IHT purposes. Separate elections can be made for different assets.

The election is made on form IHT500 and should be submitted by 31 January following the year of assessment. HMRC may accept late elections if the chargeable person can show that an event beyond their control prevented them from sending the election by the relevant filing date.

Effect of election ― land and chattels

If it is to be made at all, the election must be made for the first tax year in which an individual

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  • 27 Oct 2025 14:40

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