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HMRC internal manual

Inheritance Tax Manual

Estate Duty surviving spouse exemption: application to lifetime events

The relief is extended to cover lifetime events, where the interest of the surviving spouse terminates during his or her lifetime. The latter part of IHTA84/SCH6/PARA2 provides that tax is not charged under IHTA84/S52 on the coming to an end (IHTM04083) of an interest in possession (IIP) (IHTM16000) in settled property if

  • the spouse (or former spouse) of the person beneficially entitled to the interest died before 13 November 1974, and
  • the value of the property in which the interest subsists would by virtue of the preceding provisions (IHTM04343) of IHTA84/SCH6/PARA2 have been left out of account (IHTM04331) in determining the value of the survivor’s estate had he died immediately before the interest came to an end.