The following Trusts and Inheritance Tax guidance note by Tolley in association with Peter Rayney of Peter Rayney Tax Consulting Ltd provides comprehensive and up to date tax information covering:
Where a transfer is made within seven years of death, an additional charge to inheritance tax may arise at the time of death:
If the amount of the transfer was reduced by business property relief (BPR), the additional charge to tax is levied on the reduced amount.
The amount of the transfer is reduced by BPR before the additional charge is levied, but only if there was an entitlement to BPR at the time the PET was made.
See the BPR guidance note.
However, in both cases the additional charge to inheritance tax will be levied on the transfers without the benefit of BPR if certain conditions are not met.
BPR will reduce the value of a transfer made during the transferor’s lifetime as long as:
IHTA 1984, s 113A(3)
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