Produced by Tolley
  • 01 Jun 2022 23:51

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

  • Exit charge
  • The occasion on which an exit charge arises
  • The basis of an exit charge
  • Calculation of the exit charge
  • Calculation of the exit charge before the first 10-year anniversary
  • Same day addition
  • Exit charge proforma
  • Calculation of the exit charge between 10-year anniversaries
  • Business property relief (BPR) and agricultural property relief (APR)
  • Exceptions from an exit charge

Exit charge

When trust property ceases to be relevant property, it becomes subject to a charge to inheritance tax. This charge is known as either:

  1. the exit charge

  2. the proportionate charge

IHTA 1984, s 65

This guidance note explains how to work out the amount of tax payable when an exit charge arises. It applies to occasions of charge which arise on or after 18 November 2015, which was the date of Royal Assent of the second Finance Act of 2015. F(No 2)A 2015 amended the rules for calculating the exit charge. The former method of calculation is outlined in the Calculation of exit charge before 18 November 2015 guidance note with a summary of the changes given below.

See the Relevant property guidance note for an explanation of what relevant property is.

This note should be read in conjunction with the Principal (10-year) charge guidance note. The comments made in that note on obtaining valuations are just as pertinent to the calculation of the exit charge.

The occasion on which an exit charge arises

An exit charge arises when trust property ceases to be relevant property.

As explained in the Principal (10-year) charge guidance

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

Popular Articles

Capital vs revenue expenditure

Capital vs revenue expenditureExpenditure of a capital nature is not allowed as a deduction when calculating trading profits. Expenditure of a revenue nature is allowable, provided there is no specific statutory rule prohibiting a deduction and the expenditure also satisfies the wholly and

01 Jul 2022 09:33 | Produced by Tolley Read more Read more

Class 4 national insurance contributions

Class 2 and Class 4 national insurance contributions (NIC) are paid by self-employed individuals and partners in a partnership on their profits arising within the UK. This guidance note considers Class 4 contributions. For Class 2 contributions, see the Class 2 national insurance contributions

23 Jun 2022 10:23 | Produced by Tolley Read more Read more

Solicitors ― VAT treatment of services

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s

04 Apr 2022 11:42 | Produced by Tolley Read more Read more