Commentary

I5.350 Summary of the periodic charge

IHT, trusts and estates

I5.350 Summary of the periodic charge

The charge at the ten-year anniversary—calculating the charge

I5.350 Summary of the periodic charge

The rules for when a ten-yearly charge (often called the 'periodic' or 'principal' charge) needs to be calculated are described at I5.304. This section examines the mechanics of the calculation.

The tax rate is established by:

  1.  

    •     calculating the value of a hypothetical transfer (I5.351)

  2.  

    •     calculating the effective rate of tax on this hypothetical value (I5.353)

  3.  

    •     applying the effective rate to the amount on which tax is charged to give the actual tax charged (I5.354

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