The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
A specific gift, where the term refers to a disposition by Will, is generally understood to be a bequest of a defined asset, such as a gold watch. A pecuniary legacy of a defined amount is also a specific gift. Inheritance tax legislation defines a specific gift negatively as meaning “any gift other than a gift of residue or of a share in residue”. This is somewhat circular since residue is what is left after debts, expenses and legacies have been paid. Nevertheless it is clear that a specific gift is a particular item or quantified amount, whereas a residuary gift is part or all of what is left. If the gift is a share of residue it is defined as a division, fraction, or percentage of an unquantified amount.
Specific gifts include the following:
a single personal or household item eg a diamond ring, a painting, a motor vehicle
a collection of items eg a stamp collection, all household furniture, a library of books
a devise of land and buildings, eg a farm, the deceased’s residence
a pecuniary legacy, defined as a fixed amount, eg £20,000
a gift of money defined by its origin or a formula, eg “the money in my Yorkshire Building Society account” or “half the proceeds of sale of the Lowry painting”
a gift of shares, eg “my shares in Marks and Spencer” or “my share portfolio held by Charles Stanley stockbrokers”
property claimed as ‘legal rights’ under the law of Scotland
a nil rate band legacy, including a gift of the balance available after taking account of lifetime gifts, eg “the maximum amount which could be given to them by this will without inheritance tax becoming payable”
Note that in the last example, the specific legacy is not quantifiable at the time the Will is written. The testator does not know which lifetime gifts will become chargeable, nor, perhaps, whether he will be entitled to
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