Dispositions that are not transfers of value

Produced by Tolley
Dispositions that are not transfers of value

The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Dispositions that are not transfers of value
  • Dispositions not intended to confer gratuitous benefit
  • Dispositions for family maintenance
  • Dispositions allowable for income tax or corporation tax
  • Dispositions conferring benefits under pension schemes
  • Dispositions by close companies for the benefit of employees
  • Waiver of remuneration
  • Waiver of dividends
  • Grant of tenancies of agricultural property
  • Changes in the distribution of a person’s estate

The legislation specifically excludes certain types of arrangements from the scope of inheritance tax even though the effect is a diminution in the value of the transferor’s estate.

The dispositions that are not transfers of value are:

Dispositions not intended to confer gratuitous benefitIHTA 1984, s 10
Dispositions for family maintenanceIHTA 1984, s 11
Dispositions allowable for income tax or conferring benefits under pension schemesIHTA 1984, s 12
Dispositions by close companies for the benefit of employeesIHTA 1984, s 13
Waiver of remunerationIHTA 1984, s 14
Waiver of dividendsIHTA 1984, s 15
Grant of tenancies of agricultural propertyIHTA 1984, s 16
Changes in distributions of a deceased individual’s estateIHTA 1984, s 17

Dispositions not intended to confer gratuitous benefit

A disposition is not a transfer of value if it can be shown that:

  1. it was not intended and was not made in a transaction intended to confer any gratuitous benefit on any person

  2. it was made in a transaction at arm’s length between persons not connected with each other or it was such as might be expected of such a transaction

IHTA 1984, s 10(1)

This rule does not apply to a sale of unquoted shares or unquoted debentures unless it is shown that the sale was at a price freely negotiated at t

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