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HMRC internal manual

Inheritance Tax Manual

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HM Revenue & Customs
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Excepted settlements - proportionate charges

Proportionate charge before first ten year charge

Where a proportionate charge has arisen before the first ten year charge and the settlement passes the general conditions (IHTM06123), it will qualify as an excepted settlement where the value of the notional aggregate chargeable transfer (IHTM42112) specified in IHTA84/S68(4) does not exceed 80% of the nil rate band.

For the purposes of calculating the value of the notional chargeable transfer, no relief that might be due should be deducted and any liabilities that may be deductible from assets in charge should also be ignored.

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Proportionate charge between ten year anniversaries

Where a proportionate charge has arisen in between ten year anniversaries and the settlement passes the general conditions (IHTM06123), it will qualify as an excepted settlement where the value of the notional aggregate chargeable transfer (IHTM42082) specified in IHTA84/S66(3), taking account of IHTA/S69, (IHTM42115) does not exceed 80% of the nil rate band.

For the purposes of calculating the value of the notional chargeable transfer, no relief that might be due should be deducted and any liabilities that may be deductible from assets in charge should also be ignored.