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HMRC internal manual

Inheritance Tax Manual

Exclusions from exemption: defeasible gifts

Under IHTA84/S23 (2)(c) a gift to a charity (IHTM11112) is not exempt if it is defeasible. Broadly, a defeasible gift is one which can be defeated by a future event. Examples might be a gift that could be revoked or trustees holding settled property on trust for a charity, subject to an overriding power to appoint it to someone else.

Any gift that:

  • has not been defeated within the twelve months after the transfer, and
  • cannot be defeated at any time after this point in time(even if it could have been defeated before the twelve months had passed)

should be treated as not defeasible.