Commentary

I7.514B The rate of IHT

IHT, trusts and estates

I7.514B The rate of IHT

I7.514B The rate of IHT

Once the identity of the relevant person (see I7.514A) is established, the rate of tax can be ascertained. This depends upon whether the relevant person is alive or dead at the time of the chargeable event.

The position where he is still alive is as follows and is only relevant if the conditionally exempt transfer was a lifetime transfer made before 18 March 19861, or was an immediately chargeable transfer2 made after 17 March 1986. Conditional exemption can only be claimed on potentially exempt transfers after the transferor's death within seven years3. The IHT is charged at the half rates appropriate to a lifetime chargeable transfer4 made by the relevant person at the time of the chargeable event. Thus the value of the property is notionally added to the cumulative total of chargeable lifetime transfers made by the relevant person within the seven years preceding the chargeable event and charged at the appropriate rate for lifetime chargeable transfers5. No reduction can be made in respect of any personal exemptions, such as the annual allowances. The amount in question increases the rate of tax payable on subsequent transfers by the relevant person only if he is the person who made the last conditionally exempt transfer (see I7.515). The subsequent death of the relevant person makes no difference to which rules are used6. If at the time of the chargeable event the general rates of CTT/IHT have been reduced since the conditionally exempt transfer, it is the rates

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial