I4.241 Abatement of excessive attributable value
The purpose of the rules in IHTA 1984, s 38 (see I4.236–I4.239A) is to enable values to be attributed to specific gifts.
But because of the grossing-up rules the aggregate of the values of the specific gifts may exceed the value transferred. In these circumstances the specific gifts are treated as reduced to the extent necessary to reduce their value to that of the value transferred1.
T, whose marginal rate of IHT is 40%, dies leaving an estate of £250,000. He gives his son a legacy of £180,000, free of tax, and residue passes to his wife. The value attributable to the specific gift is £180,000 grossed up at 40%, ie £300,000. This exceeds the value transferred by £50,000.
The value of