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HMRC internal manual

Inheritance Tax Manual

Dispositions not intended to confer bounty: application of the relief

This page describes how a disposition may be excluded from the Inheritance Tax (IHT) charge under IHTA84/S10.

Step 1

There must be a disposition – see IHTM04023.

Step 2

If there is a disposition what assets were disposed of? If the disposition was of unquoted shares or a reversionary interest (IHTM04282) the provisions of IHTA84/S10 may not apply (IHTM04163).

Step 3

Irrespective of the type of asset disposed of, was the disposition intended, or made in a transaction intended, to confer bounty (IHTM04165)?

If the transferor intended to make a gift or confer gratuitous benefit on another person, the provisions of IHTA84/S10 cannot apply.

Step 4

If the disposition was not intended to confer bounty, was the transaction made at arms-length between two people not connected with each other, or as might be expected to be made at arms-length between two people not connected with each other (IHTM04166)?

If yes, the provisions of IHTA84/S10 apply and the disposition is not a transfer of value (IHTM04024).