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HMRC internal manual

Inheritance Tax Manual

Exemptions: gifts for public benefit

The guidance on this page only applies to transfers on or before 17 March 1998 as this section was repealed by FA1998/S143 (1).

You should refer any claim for this exemption to Heritage.

IHTA84/S26 (1) provides that a transfer of value (IHTM04024) is an exempt transfer to the extent that

  • the value transferred (IHTM04028) is attributable to property of certain specified categories which becomes the property of a body not established for profit, and
  • the Board so directs

IHTA84/S26 (2) applies the exemption to gifts that are made during lifetime or on death to a body approved by the Board. The gifted property can be land, buildings, objects normally kept within the buildings, works of art or other objects of national interest, and property given as a source of income for the upkeep of any such property.

Under IHTA84/S26 (4) the Board may require undertakings to be given, to

  • restrict the use or disposal of the property
  • ensure its preservation, and
  • provide public access

The exemption has no value limit and, assuming the requirements above are satisfied, it operates in the same way as the exemptions for gifts to charities (IHTM11101) and political parties (IHTM11191). The instructions on the limitations (IHTM11171) to charity exemption and application of charity exemption to settled property (IHTM11161) also apply to this exemption. For the purpose of applying IHTA84/S23 (2) to IHTA84/S23 (5) to this exemption, property is given to any person or body if it becomes the property of or is held in trust for that person or body. The word ‘donor’ is construed in the same way.

The instructions on quantifying exemption (IHTM11192) for gifts to political parties also apply to this exemption.