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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: the charge to tax: grossing: partial grossing

You will have to consider partial grossing (IHTM14543) where the transferor pays only part of the tax in a situation where grossing applies (IHTM14541). To do this, you

  • work out the chargeable transfer before grossing
  • deduct the amount of tax agreed to be paid by the transferee and
  • gross up the net figure.

The result is the gross chargeable transfer. Instalments are only available on the part of the value that is not grossed up.

If any difficulty arises in the calculation from an agreement to share the tax burden, you should begin by asking the taxpayers to supply their computation of the gross chargeable transfer. You can then refer their figures to the Actuarial Team if necessary.


Ashley gave Settlement B £400,000 (after exemptions) in December 2008

Settlement B agreed to pay £10,000 of the tax.

The calculation is:

Chargeable transfer £400,000
Payment by transferee £10,000
Grossed-up chargeable transfer £390,000

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Check the result

Tax on £406,250 £16,250
Less paid by transferee £10,000
Payable by transferor £6,250

The gross transfer = £6,250 + £400,000 = £406,250