Commentary

I3.723 Excluded transactions (land and chattels)

IHT, trusts and estates

I3.723 Excluded transactions (land and chattels)

I3.723 Excluded transactions (land and chattels)

For the purposes of the disposal condition relating to land or chattels, the taxpayer's disposal of an interest in the relevant land, or the chattel, or replaced property, is disregarded if it is an 'excluded transaction'1.

Similarly, for the purposes of the contribution condition relating to land or chattels, the taxpayer's provision of consideration given by another person for an interest in the relevant land, or the chattel, or replaced property, is disregarded if it is an 'excluded transaction'2.

In relation to any particular relevant land or chattel, an original disposal or contribution by the taxpayer cannot lead to a pre-owned assets charge if it is an excluded transaction. However, a subsequent transaction by another person in relation to that particular property cannot qualify as an excluded transaction, and cannot therefore be used to 'exclude' an earlier non-excluded transaction affecting the same relevant land or chattel.

HMRC's Inheritance Tax Manual IHTM44030 states:

'QuoteStartThe exclusions apply only to charges arising on land and chattels, they do not apply to the charge on intangibles.QuoteStop'

However, an excluded transaction may involve any kind of property, including intangible property. For example, an excluded transaction could involve intangible property that was later replaced by land or chattels, thus removing the land or chattels in question from the scope of the pre-owned assets charge.

For the purposes of the disposal condition, the taxpayer's disposal of any property is an excluded transaction in relation to him if any of the following circumstances apply:

  1.  

    (a)     It was a

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