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HMRC internal manual

Inheritance Tax Manual

Procedure: special situations

  • To the extent to which a lifetime transfer (IHTM14000) is charity exempt the gift which constitutes the transfer of value (IHTM04024) cannot be taxed under the gift with reservation (IHTM04071) rules.
  • Where the parties claim that the charity exemption applies to a close company transfer (IHTM14851) you should refer the case to Shares and Assets Valuation.
  • Where the transfer of value in favour of a charity (IHTM11112) takes the form of a loan of money or other property to the charity, then

    • the value transferred is treated as attributable to the property that can be used by the borrower - IHTA84/S29 (5)
    • that property is treated as given to or becoming the property of the charity provided it can be used only for charitable purposes or for the purposes of a body within IHTA84/S24 IHTA84/S25 or IHTA84/S26 or (if the property is land) IHTA84/S24A), and
    • the various exceptions (IHTM11171) in IHTA84/S23 (2) to IHTA84/S23 (6) do not apply