Quick succession relief

What is quick succession relief?

Quick succession relief (QSR) reduces the tax payable when the same property has been subject to more than one charge to IHT. It applies where there have been two chargeable transfers on which tax is payable within a period of five years.

Although commonly called QSR, it is described in the legislation as relief for ‘successive charges’.

Typically it arises in a deceased estate which includes inherited property. For example, if a person dies within five years of inheriting an interest in another estate, it is quite likely that inheritance tax will have been paid on the first death and will become payable again on the second death. The relief reduces the tax payable on the second death.

It may also arise in the following situations:

1. •

   where the deceased received a lifetime gift from another person (a potentially exempt transfer) which becomes taxable because that other person has died within seven years of the gift. Note that the donor’s death could occur after the death of the recipient.

2. •

   where the second transfer is a chargeable lifetime transfer arising on the termination of a qualifying interest in possession and the QIIP was acquired on an earlier chargeable transfer

These two unusual circumstances are described more fully below.

Conditions for QSR

A potential claim for QSR should identify an earlier transfer and a later transfer of the same property within five years of each other, both of which would incur a liability to inheritance tax. There must be a link between the two in that the value transferred initially is followed through to the second transfer.

However, it is not necessary for the actual property received under the earlier transfer to be included in the second estate to claim QSR. For example, if the deceased had inherited money, he may have spent it. If he has disposed of it by way of gift, those transfers must be brought into the computation of the death estate in