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HMRC internal manual

Inheritance Tax Manual

Structure of the charge: what is a deemed transfer of value?

A deemed transfer of value is one that is imposed by statute on a particular event or series of events. In general, the IHT legislation applies to deemed transfers of value in the same way as it does to actual transfers of value, but

  • certain exemptions – mainly lifetime exemptions (IHTM14131) – may not apply
  • reliefs which say that a particular event shall not be a transfer of value (IHTM04151) cannot apply, and
  • the value transferred may not be established by reference to the loss to transferor’s estate. (IHTM04054)Events that are deemed to be transfers of value are

  • on death, (IHTM04041)
  • the termination or disposal of an interest in possession in settled property, (IHTM04083)
  • a transfer by a close company, (IHTM04067)
  • property ceasing to be subject to a reservation of benefit in the donor’s lifetime (IHTM04064) which is a deemed PET,
  • the discharge or reduction of a debt subject to abatement (IHTM04064) under FA86/S103, which is a deemed PET.