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HMRC internal manual

Inheritance Tax Manual

Dispositions for the maintenance of the transferor’s family: care or maintenance of a dependent relative

A disposition (IHTM04023) is not a transfer of value (IHTM04024) if it satisfies two conditions

  • it is made in favour of a dependent relative (IHTM04178) of the transferor,
  • it makes reasonable provision for the relative’s care or maintenance. (IHTM04172)

Unlike the position of the spouse or civil partner (IHTM11032) (IHTM04173) and children, (IHTM04175) this provision may be for ‘care’ or maintenance, but it must be reasonable. The expressions are not defined, but ‘care’ suggests the provision of services, whether privately or in an institution.

‘Reasonable’ would suggest such amount as is reasonably necessary for the purpose of providing care and maintenance (but no more), having regard to the financial and other circumstances of the transferor and the relative and the degree of incapacity (IHTM04179) or infirmity of the latter.

You should refer any case of a large gift claimed to qualify for relief under IHTA84/S11 (3) to Technical.