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HMRC internal manual

Inheritance Tax Manual

Settled property: excepted terminations

An account is not required in the case of an excepted termination, unless the Board requests one by notice in writing, SI 1981 No 1440. In general, a request for an account (IHTM10835) must be made within 6 months of the termination.

An ‘excepted termination’ is the termination of an interest in settled property where

  • the transferor has, in connection with the termination, given the trustees a notice under IHTA84/S57 informing them of the availability of an exemption, and
  • the value transferred as a result of the termination does not exceed the amount of the exemption specified in the notice.

The term ‘value’ means value for the purposes of IHT.

If an account is not delivered because of these regulations but it is subsequently discovered that the termination is not ‘excepted’, then the trustees must deliver an account within 6 months of discovering the error.