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HMRC internal manual

Capital Gains Manual

2006 IHT changes: introduction

In the 2006 Budget the Chancellor announced fundamental changes to the treatment ofsettlements for IHT. The legislation incorporated changes to the treatment for CGT where aperson with an interest in possession died. It also had significant consequences for CGTbecause of the increase in occasions of charge for IHT.

The purpose of this part of the CG Manual is to provide explanations largely by way ofchecklists to demonstrate the interaction between IHT and CGT, with particular referenceto CGT gifts hold-over relief, both before and after FA2006. It is not possible to set outevery possible set of circumstances. Nor should it be regarded as a substitute for themore detailed guidance elsewhere in CG Manual, and in the IHT Manual.

An outline of the new IHT treatment is at CG36540.