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HMRC internal manual

Inheritance Tax Manual

Exceptions where the exemption does not apply: introduction

The main limitations on spouse or civil partner (IHTM11032) exemption are that it does not apply to

  • postponed gifts (IHTM11092) (IHTA84/S18 (3) (a)), and
  • conditional gifts (IHTM11093) (IHTA84/S18 (3) (b))

For these purposes, property as given to a person if it becomes their property or is held on trust for that person. This provision applies to the whole of IHTA84/S18 but is particularly relevant to subsection (3).

In addition, spouse or civil partner exemption does not apply to certain dealings with settled property (IHTM11061), including reversionary interests (IHTM11063).

In practice you can accept, without further investigation, that a gift to a spouse or civil partner is exempt if it is made under the deceased’s Will or codicil and it satisfies certain conditions (IHTM11023).

If the transfer does not satisfy these conditions you should consider IHTA84/S18 (3) and the following instructions.