Commentary

I3.258 Grossing up where the transferor pays the tax

IHT, trusts and estates

I3.258 Grossing up where the transferor pays the tax

I3.258 Grossing up where the transferor pays the tax

Where a lifetime transfer of value is neither fully exempt nor potentially exempt (Division I3.3), so that IHT is chargeable in respect of the transfer without waiting to see if the transferor survives for seven years, and the transferor pays the IHT, the transfer is 'grossed up' in calculating the value transferred. This is because the loss to the transferor's estate is not just the disposition but the tax on it as well. Grossing up is described, in the context of tax computation, in I3.523.

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