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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: loss to estate less than value of property given

The loss to the transferor’s estate (IHTM04054) is less than the value of the property (IHTM04030) given if the property given

  • remains part of the deceased’s estate, (IHTM04029)
  • includes excluded property, (IHTM04251) or
  • if the transferee pays the expenses (other than any IHT on the transfer) incurred by the transferor in making the transfer, IHTA84/S164.

Example 1A puts £200,000 into a settlement where the trusts are for A to life with remainder over. The £200,000 remains part of A’s estate, so although there is a disposition, (

IHTM04023) there is no loss to the estate and no transfer of value. (IHTM04024)

Example 2Under the Will of T, property is settled on L for life with remainder to R. R gives the reversionary interest (

IHTM16000) to L. The reversion is an item of property which has value. But it is excluded from the charge (IHTM04281) which is disregarded in considering whether the disposition has given rise to a loss to R’s estate. The disposition is not a transfer of value.