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HMRC internal manual

Inheritance Tax Manual

Exemptions: introduction

The IHTA84 contains a number of exemptions and reliefs which exclude transactions or property from being, or forming part of, a chargeable transfer (IHTM04027). These exemptions and reliefs work so that, for example,

  • some dispositions (IHTM04023) are not transfers of value (IHTM04151)
  • some transfers are wholly or partly exempt
  • some transfers are of excluded property (IHTM04251)

There are others. This chapter is concerned only with the provisions which make transfers into ‘exempt transfers’. Nearly all those provisions are contained in Part II of the IHTA. The main exempt transfer provision outside Part II is for Potentially Exempt Transfers (PETs) (IHTM04057).

The framework for the operation of the exempt transfers provisions is provided by the main charging (IHTM04021) sections of the IHTA84 - in particular IHTA84/S1 & IHTA84/S2

A transfer may be wholly exempt. If it is not you should follow the instructions on calculating (IHTM26001) the chargeable estate, to find the amount of the chargeable transfer.

The different types of exempt transfers are divided into several groups (IHTM11011) for the purpose of these instructions.