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HMRC internal manual

Inheritance Tax Manual

Woodlands: the death estate

For the relief to be available, the trees or underwood must be growing on land which is reflected in the value of a person’s estate (IHTM04030) immediately before his death - IHTA84/S125 (1)(a). The normal rules apply to determine what constitutes a deceased’s death estate for this purpose. The main categories included and so for which the relief may be available (the other conditions also have to be satisfied) are

  • the free estate
  • the deceased’s severable share of joint property, (IHTM15082) or in Scotland heritable property passing under a survivorship destination (IHTM15091)
  • settled property in which the deceased had a qualifying interest in possession, (IHTM16062) and
  • property chargeable under FA86/S102 (3) as a gift with reservation of benefit (GWR) (IHTM14301). You should refer any claim for relief where tax is chargeable under FA1984/S102 (3) to Technical to consider the question of who is beneficially entitled to GWR property under IHTA84/S125 (1)(b).

The main categories excluded from the death estate, and so for which there can be no relief, are

  • lifetime transfers other than GWRs -  the fact that a potentially exempt transfer (IHTM04057) becomes chargeable solely by reason of the transferor’s death within seven years does not make it part of the death estate,
  • charges on trusts under the relevant property regime,
  • transfers by close companies.