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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
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Dispositions not intended to confer bounty: outline of IHTA84/S10

IHTA84/S10 (1) provides that a disposition (IHTM04023) is not a transfer of value (IHTM04024) if it is shown that two conditions are satisfied. The words ‘if it is shown’ put the burden of proof on the person who contends that the disposition satisfies the conditions. The two conditions are

  1. that the disposition was not intended, and was not made in a transaction intended, to confer any gratuitous benefit (IHTM04165) on any person, and

  2. that either:

* it was made in a transaction at arm’s length ([IHTM04166](https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm04166)) between persons not connected with each other, or
* it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.The use of the word person (

IHTM04052) enables the subsection to apply to dispositions to companies.

IHTA84/S10 does not apply directly to the deemed transfer of value (IHTM04025) on the lifetime termination of an interest in possession (IHTM04083) in settled property. But it is relevant in considering the application of IHTA84/S52 (3) to transactions between trustees and beneficiaries, etc which reduce the value of trust property (IHTM04086).

The provisions are also imported by IHTA84/S70 (4) to a limited extent to charges on special trusts (IHTM04098) under the discretionary trust regime.

And there are two situations where the application of IHTA84/S10 is qualified or excluded. (IHTM04163)