The exit charge

When trust property ceases to be relevant property, it becomes subject to a charge to inheritance tax. This charge is known as either:

1. •

   the exit charge

2. •

   the proportionate charge

IHTA 1984, s 65

See the Relevant property guidance note for an explanation of what relevant property is.

The comments on obtaining valuations in the Principal (10-year) charge guidance note apply equally here.

As explained in the Principal (10-year) charge guidance note, relevant property is subject to a principal charge on each 10th anniversary after the trust was created. If property leaves the trust, it will escape the charge on the next 10-year anniversary, although it will have been relevant property for part of the 10-year period. To compensate