Commentary

I5.316 Amount on which exit charge is taxed

IHT, trusts and estates

I5.316 Amount on which exit charge is taxed

I5.316 Amount on which exit charge is taxed

The amount on which an exit charge (see I5.305) is charged is the amount by which the value of relevant property in the settlement has been reduced after the event in question1. Where the tax is paid out of the relevant property in the settlement (in the case of a distribution, paid by the trustees and not the beneficiary), the reduction in value is 'grossed-up' by the amount of tax charged on it2.

One effect of this charging provision is that a diminution in value of any property in the same settlement which

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