Commentary

I5.310 Exit charges summary

IHT, trusts and estates

I5.310 Exit charges summary

Exit charges before first anniversary—calculating the charge

I5.310 Exit charges summary

The exit charge (I5.305) that arises before the first ten-year anniversary of a settlement is calculated in a series of procedural steps.

The tax rate is established by:

  1.  

    •     calculating the value of a hypothetical transfer (I5.311)

  2.  

    •     calculating the effective rate of tax on this hypothetical value (I5.313)

  3.  

    •     calculating the appropriate fraction. This is done by multiplying the effective rate by 30% and adjusting it to reflect how long the property has been relevant property since the settlement commenced (I5.314)

  4.  

    •     multiplying the effective rate by

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