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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
, see all updates

How Inheritance Tax is charged: contents

Summary
  1. IHTM04001
    Summary
History
  1. IHTM04010
    History
Structure of the charge
  1. IHTM04021
    Structure of the charge: Main charging provisions
  2. IHTM04022
    Structure of the charge: How a disposition becomes a chargeable transfer
  3. IHTM04023
    Structure of the charge: What is a disposition?
  4. IHTM04024
    Structure of the charge: What is a transfer of value?
  5. IHTM04025
    Structure of the charge: What is a deemed transfer of value?
  6. IHTM04026
    Structure of the charge: What is an exempt transfer?
  7. IHTM04027
    Structure of the charge: What is a chargeable transfer?
  8. IHTM04028
    Structure of the charge: What is the value transferred?
  9. IHTM04029
    Structure of the charge: What makes up a person's estate?
  10. IHTM04030
    Structure of the charge: What is property?
  11. IHTM04031
    Structure of the charge: What is meant by beneficially entitled?
  12. IHTM04032
    Structure of the charge: How the meaning of estate is extended
  13. IHTM04033
    Structure of the charge: How the meaning of estate is restricted
  14. IHTM04034
    Structure of the charge: What is a general power?
  15. IHTM04035
    Structure of the charge: What is general power property?
Transfers on death
  1. IHTM04041
    Transfers on death: The charging provisions
  2. IHTM04042
    Transfers on death: Deemed tranfer on death
  3. IHTM04043
    Transfers on death: What makes up the estate on death?
  4. IHTM04044
    Transfers on death: What is the value transferred on death?
  5. IHTM04045
    Transfers on death: Valuing property together
  6. IHTM04046
    Transfers on death: Changes in value by reason of death
Lifetime transfers
  1. IHTM04051
    Lifetime transfers: The charging provisions
  2. IHTM04052
    Lifetime transfers: What is mean by a person?
  3. IHTM04053
    Lifetime transfers: What is mean by an individual?
  4. IHTM04054
    Lifetime transfers: The loss to the transferor's estate
  5. IHTM04055
    Lifetime transfers: Loss to estate greater than the value of property given
  6. IHTM04056
    Lifetime transfers: Loss to estate less than the value of property given
  7. IHTM04057
    Lifetime transfers: What is a potentially exempt transfer?
  8. IHTM04058
    Lifetime transfers: When is a gift made to another individual or specified trust?
  9. IHTM04059
    Lifetime transfers: When does property become comprised in the estate of an individual?
  10. IHTM04060
    Lifetime transfers: When is the value of another individual's estate increased?
  11. IHTM04061
    Lifetime transfers: Transfers that cannot be potentially exempt transfers
  12. IHTM04062
    Lifetime transfers: Woodlands subject to a deferred Estate Duty charge
  13. IHTM04063
    Lifetime transfers: Deemed transfers that are potentially exempt transfers
  14. IHTM04064
    Lifetime transfers: Deemed potentially exempt transfers
  15. IHTM04065
    Lifetime transfers: Purchase of a policy linked with an annuity
  16. IHTM04066
    Lifetime transfers: What is the value transferred by a potentially exempt transfer?
  17. IHTM04067
    Lifetime transfers: What is an immediately chargeable transfer?
  18. IHTM04068
    Lifetime transfers: Transfer of value by a close company
  19. IHTM04069
    Lifetime transfers: Alteration in share capital of a close company
  20. IHTM04070
    Lifetime transfers: What is the value transferred by an immediately chargeable transfer?
  21. IHTM04071
    Lifetime transfers: Introduction to Gifts with Reservation (GWR)
  22. IHTM04072
    Lifetime transfers: The charging provisions for GWRs
  23. IHTM04073
    Lifetime transfers: What is the value transferred by a GWR?
Settled property
  1. IHTM04081
    Settled property: Introduction
  2. IHTM04082
    Settled property: The charging provisions for an interest in possession trust on death
  3. IHTM04083
    Settled property: The charging provisions for an interest in possession trust during lifetime
  4. IHTM04084
    Settled property: The charge where an interest in possession comes to an end
  5. IHTM04085
    Settled property: The charge where an interest is possession is disposed of
  6. IHTM04086
    Settled property: The charge where the value of settled property is reduced
  7. IHTM04087
    Settled property: Changes to settled property where IHT is not charged on an interest in possession trust
  8. IHTM04088
    Settled property: The charge where an interest in possession comes to end following a potentially exempt transfer
  9. IHTM04089
    Settled property: The charge where a both a close company and an interest in possession are involved
  10. IHTM04090
    Settled property: Transfer of value by a close company apportioned to trustees
  11. IHTM04091
    Settled property: Alteration in a close company's capital apportioned to trustees
  12. IHTM04092
    Settled property: The charge where a close company is entitled to an interest in possession
  13. IHTM04093
    Settled property: What is the value transferred when an interest in possession ceases?
  14. IHTM04094
    Settled property: What valuation issues when an interest is possession ceases
  15. IHTM04095
    Settled property: The charging provisions for discretionary trusts
  16. IHTM04096
    Settled property: Charges on property held in discretionary trusts
  17. IHTM04097
    Settled property: What is value of property held in discretionary trusts on which tax is charged?
  18. IHTM04098
    Settled property: Charges on special trusts
  19. IHTM04099
    Settled property: Charges on accumulation and maintenance trusts
  20. IHTM04100
    Settled property: Charges on employee and newspaper trusts
  21. IHTM04101
    Settled property: Charges on protective trusts
  22. IHTM04102
    Settled property: Charges on trusts for disabled persons
  23. IHTM04103
    Settled property: Charges on temporary charitable trusts
  24. IHTM04104
    Settled property: Maintenance funds for historic buildings
Heritage property
  1. IHTM04111
    Heritage property: Summary
  2. IHTM04112
    Heritage property: When a charge to tax arises
  3. IHTM04113
    Heritage property: Chargeable events under s.32
  4. IHTM04114
    Heritage property: Exceptions to the charge under s.32
  5. IHTM04115
    Heritage property: Chargeable events under s.32A
  6. IHTM04116
    Heritage property: Exceptions to the charge under s.32A
  7. IHTM04117
    Heritage property: Special situations
  8. IHTM04118
    Heritage property: Double charges
Woodlands
  1. IHTM04121
    Woodlands: Summary
  2. IHTM04122
    Woodlands: The deferred charge
Property excluded from charge
  1. IHTM04141
    Property excluded from charge: Provisions which exclude the Inheritance Tax Act
Property excluded from charge: Dispositions that are not transfers of value
  1. IHTM04151
    Property excluded from charge: Dispositions that are not transfers of value: Introduction
  2. IHTM04200
    Property excluded from charge: Dispositions that are not transfers of value: Dispositions by close companies for the benefit of employees
  3. IHTM04210
    Property excluded from charge: Dispositions that are not transfers of value: Waiver or repayment of an amount of remuneration
  4. IHTM04220
    Property excluded from charge: Dispositions that are not transfers of value: Waiver of dividends
  5. IHTM04230
    Property excluded from charge: Dispositions that are not transfers of value: Grant of an agricultural tenancy
  6. IHTM04240
    Property excluded from charge: Dispositions that are not transfers of value: Changes in the distribution of the deceased's estate
  7. IHTM04250
    Property excluded from charge: Dispositions that are not transfers of value: Refund to trustees of Income Tax repayments received by settlor
Property excluded from charge: Dispositions not intended to confer bounty
  1. IHTM04161
    Property excluded from charge: Dispositions not intended to confer bounty: Outline of s.10
  2. IHTM04162
    Property excluded from charge: Dispositions not intended to confer bounty: Application of the relief - flowchart
  3. IHTM04163
    Property excluded from charge: Dispositions not intended to confer bounty: S.10 qualified or excluded
  4. IHTM04164
    Property excluded from charge: Dispositions not intended to confer bounty: Definitions
  5. IHTM04165
    Property excluded from charge: Dispositions not intended to confer bounty: First condition - gift not intended
  6. IHTM04166
    Property excluded from charge: Dispositions not intended to confer bounty: Second condition - arm's length transaction
  7. IHTM04167
    Property excluded from charge: Dispositions not intended to confer bounty: Application to settled property
Property excluded from charge: Dispositions for the maintenance of the transferor's family
  1. IHTM04171
    Property excluded from charge: Dispositions for the maintenance of the transferor's family: Outline of s.11
  2. IHTM04172
    Property excluded from charge: Dispositions for the maintenance of the transferor's family: Definitions
  3. IHTM04173
    Property excluded from charge: Dispositions for the maintenance of the transferor's family: Maintenance of a spouse of civil partner
  4. IHTM04174
    Property excluded from charge: Dispositions for the maintenance of the transferor's family: Maintenance, etc., of children - flowchart
  5. IHTM04175
    Property excluded from charge: Dispositions for the maintenance of the transferor's family: Maintenance, etc., of the transferor's children
  6. IHTM04176
    Property excluded from charge: Dispositions for the maintenance of the transferor's family: Maintenance, etc., of other people's children
  7. IHTM04177
    Property excluded from charge: Dispositions for the maintenance of the transferor's family: Care and maintenance of a dependent relative
  8. IHTM04178
    Property excluded from charge: Dispositions for the maintenance of the transferor's family: Meaning of a dependent relative
  9. IHTM04179
    Property excluded from charge: Dispositions for the maintenance of the transferor's family: Meaning on incapacity
  10. IHTM04180
    Property excluded from charge: Dispositions for the maintenance of the transferor's family: Dispositions satisfying s.11 in part
  11. IHTM04181
    Property excluded from charge: Dispositions for the maintenance of the transferor's family: Application to settled property
Property excluded from charge: Dispositions allowable for income tax or conferring retirement benefits
  1. IHTM04191
    Property excluded from charge: Dispositions allowable for income tax or conferring retirement benefits: Outline of s.12
  2. IHTM04192
    Property excluded from charge: Dispositions allowable for income tax or conferring retirement benefits: Deductions allowable for income tax
  3. IHTM04193
    Property excluded from charge: Dispositions allowable for income tax or conferring retirement benefits: Provision by employers for employee's retirement
Property excluded from charge: Excluded property
  1. IHTM04251
    Property excluded from charge: Excluded property: Introduction
  2. IHTM04260
    Property excluded from charge: Excluded property: Foreign 'unsettled' property
  3. IHTM04261
    Property excluded from charge: Excluded property: Savings of individuals domiciled in Channel Islands or Isle of Man
  4. IHTM04262
    Property excluded from charge: Excluded property: Holdings in Open End Investment Companies (OEICs) and Authorised Unit Trusts (AUT)
  5. IHTM04263
    Property excluded from charge: Excluded property: Decorations, medals and awards
Property excluded from charge: Foreign settled property
  1. IHTM04271
    Property excluded from charge: Foreign settled property: Introduction
  2. IHTM04272
    Property excluded from charge: Foreign settled property: When the settlement was made
  3. IHTM04273
    Property excluded from charge: Foreign settled property: The settlor's domicile
  4. IHTM04274
    Property excluded from charge: Foreign settled property: Identifying the settled property
Property excluded from charge: Reversionary interests
  1. IHTM04281
    Property excluded from charge: Reversionary interests: Introduction
  2. IHTM04282
    Property excluded from charge: Reversionary interests: Purchased reversions
  3. IHTM04283
    Property excluded from charge: Reversionary interests: Reversion under own or spouse's/civil partner's settlement
  4. IHTM04284
    Property excluded from charge: Reversionary interests: Lease for life
  5. IHTM04285
    Property excluded from charge: Reversionary interests: Interest subject to an annuity
  6. IHTM04286
    Property excluded from charge: Reversionary interests: Reversions and foreign issues
Property excluded from charge: Government securities in foreign ownership
  1. IHTM04291
    Property excluded from charge: Government securities in foreign ownership: Introduction
  2. IHTM04293
    Property excluded from charge: Government securities in foreign ownership: Exclusion from the IHT charge
  3. IHTM04294
    Property excluded from charge: Government securities in foreign ownership: Type of security and ownership
  4. IHTM04295
    Property excluded from charge: Government securities in foreign ownership: Ordinary residence
  5. IHTM04296
    Property excluded from charge: Government securities in foreign ownership: Domicile
  6. IHTM04297
    Property excluded from charge: Government securities in foreign ownership: Close company with an interest in possession
  7. IHTM04298
    Property excluded from charge: Government securities in foreign ownership: Relevant property trusts and FOTRA gilts
  8. IHTM04299
    Property excluded from charge: Government securities in foreign ownership: Conversion to FOTRA gilts and the relevant property trust charge
  9. IHTM04300
    Property excluded from charge: Government securities in foreign ownership: Anti-avoidance provsions
  10. IHTM04301
    Property excluded from charge: Government securities in foreign ownership: Exclusion of interest on FOTRA gilts
  11. IHTM04302
    Property excluded from charge: Government securities in foreign ownership: Exclusion of repayment of Income Tax on FOTRA gilts
  12. IHTM04303
    Property excluded from charge: Government securities in foreign ownership: Reversionary interest in FOTRA gilts
  13. IHTM04304
    Property excluded from charge: Government securities in foreign ownership: FOTRA gilts in unadministered estates
  14. IHTM04305
    Property excluded from charge: Government securities in foreign ownership: FOTRA gilts as partnership assets
  15. IHTM04306
    Property excluded from charge: Government securities in foreign ownership: List of FOTRA securities in issue at 5 April 1998
Property excluded from charge: Property of visiting forces
  1. IHTM04321
    Property excluded from charge: Property of visiting forces: Introduction
  2. IHTM04322
    Property excluded from charge: Property of visiting forces: Qualifying persons
  3. IHTM04323
    Property excluded from charge: Property of visiting forces: Protection of domicile and residence
  4. IHTM04324
    Property excluded from charge: Property of visiting forces: Designated countries
Property excluded from charge: Value left out of account
  1. IHTM04331
    Property excluded from charge: Value left out of account: Introduction
  2. IHTM04360
    Property excluded from charge: Value left out of account: Settled property to which the settlor's spouse, civil partner, widow(er) or surviving civil partner is entitled
  3. IHTM04380
    Property excluded from charge: Value left out of account: Foreign currency bank accounts
  4. IHTM04390
    Property excluded from charge: Value left out of account: Overseas pensions
  5. IHTM04410
    Property excluded from charge: Value left out of account: Interest in possession as remuneration for services as trustee
Property excluded from charge: Estate Duty surviving spouse exemption
  1. IHTM04341
    Property excluded from charge: Estate Duty surviving spouse exemption: Introduction
  2. IHTM04342
    Property excluded from charge: Estate Duty surviving spouse exemption: Entitlement to relief - flowchart
  3. IHTM04343
    Property excluded from charge: Estate Duty surviving spouse exemption: Application on death
  4. IHTM04344
    Property excluded from charge: Estate Duty surviving spouse exemption: Application to lifetime events
  5. IHTM04345
    Property excluded from charge: Estate Duty surviving spouse exemption: Procedures where relief is due
  6. IHTM04346
    Property excluded from charge: Estate Duty surviving spouse exemption: Procedures where relief is not due
Property excluded from charge: Reverter to settlor
  1. IHTM04351
    Property excluded from charge: Reverter to settlor: Introduction
  2. IHTM04352
    Property excluded from charge: Reverter to settlor: Limitations to the relief
  3. IHTM04353
    Property excluded from charge: Reverter to settlor: Statutory restrictions
Property excluded from charge: Woodlands
  1. IHTM04371
    Property excluded from charge: Woodlands: Summary
  2. IHTM04373
    Property excluded from charge: Woodlands: The conditions for relief
  3. IHTM04374
    Property excluded from charge: Woodlands: The death estate
  4. IHTM04375
    Property excluded from charge: Woodlands: The election
  5. IHTM04376
    Property excluded from charge: Woodlands: Beneficial entitlement under special types of interest
  6. IHTM04377
    Property excluded from charge: Woodlands: European Economic Area (EEA) - deaths on or after 22 April 2009
  7. IHTM04378
    Property excluded from charge: Woodlands: European Economic Area (EEA) - retrospective application for deaths before 22 April 2009
Property excluded from charge: Compensation for wrongs suffered during the World War II
  1. IHTM04421
    Property excluded from charge: Compensation for wrongs suffered during the World War II: Ex-gratia payment to Britons held as prisoners of war by the Japanese
  2. IHTM04422
    Property excluded from charge: Compensation for wrongs suffered during the World War II: Payments to slave or forced labourers or other victims of the German Nationalist Socialist (Nazi) regime
  3. IHTM04423
    Property excluded from charge: Compensation for wrongs suffered during the World War II: How to apply the relief
Legal background
  1. IHTM04441
    Legal background: The concept of beneficial ownership (England, Wales & Northern Ireland)
  2. IHTM04442
    Legal background: Connected persons
  3. IHTM04470
    Legal background: The meaning of 'property'
Legal background: Estate Duty surviving spouse exemption
  1. IHTM04451
    Legal background: Estate Duty surviving spouse exemption: Introduction
  2. IHTM04452
    Legal background: Estate Duty surviving spouse exemption: Duty treated as paid in full on the first death
  3. IHTM04453
    Legal background: Estate Duty surviving spouse exemption: Restriction on exemption because of non-payment
  4. IHTM04454
    Legal background: Estate Duty surviving spouse exemption: Part of fund not dutiable on the first death
  5. IHTM04455
    Legal background: Estate Duty surviving spouse exemption: Treatment of income
  6. IHTM04456
    Legal background: Estate Duty surviving spouse exemption: Payment of duty in respect of any settled property since the date of the settlement
  7. IHTM04457
    Legal background: Estate Duty surviving spouse exemption: Meaning of 'competent to dispose'
  8. IHTM04458
    Legal background: Estate Duty surviving spouse exemption: Powers where the person is competent to dispose
  9. IHTM04459
    Legal background: Estate Duty surviving spouse exemption: Powers where the person is not competent to dispose
  10. IHTM04460
    Legal background: Estate Duty surviving spouse exemption: Powers exercisable to will of deed
  11. IHTM04461
    Legal background: Estate Duty surviving spouse exemption: Power to appropriate capital
  12. IHTM04462
    Legal background: Estate Duty surviving spouse exemption: Benefits under intestacy (England & Wales)
  13. IHTM04463
    Legal background: Estate Duty surviving spouse exemption: Benefits under intestacy and legal rights (Scotland)
  14. IHTM04464
    Legal background: Estate Duty surviving spouse exemption: Examples of competency to dispose
  15. IHTM04465
    Legal background: Estate Duty surviving spouse exemption: Meaning of 'parties to a marriage'