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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Lifetime transfers: schemes to exploit annual exemption: introduction

Some transferors make a series of transactions designed to exploit the annual exemption. These fall into two broad types of scheme:

  • transfer of the property by way of sale (IHTM14152), but with the sale price unpaid and treated as a loan by the transferor which is then written off against the annual exemption, and
  • annual transfers of portions of a property (IHTM14161) - the portions being equal to the annual exemptions.