Commentary

I5.318 Exit charge before first anniversary—examples

IHT, trusts and estates

I5.318 Exit charge before first anniversary—examples

I5.318 Exit charge before first anniversary—examples

Example 1—hypothetical value

On 26 July 2005 Eliza settled £600,000 on trust — half as a QIIP for her son Ian and half on discretionary trusts. On the same date she settled quoted shares worth £100,000 on trust for her daughter, Sheila, for life.

Because this is before 18 November 2015, the non-relevant property (the QIIP half) is included in the calculation.

The value of the hypothetical value transferred is £700,000.

Example 2—tax at half rates

Eliza made chargeable lifetime transfers (CLTs) before July 2005 totalling £85,000.

The notional charge is therefore:

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