IHTM14732 - Lifetime transfers: specific lifetime reliefs: disallowed debts: discretionary trusts

If the double charges regulations result in the charge on the death estate being wholly retained and the charge on the lifetime transfer being wholly or partly disregarded, you can disregard that lifetime transfer to the same extent for all Inheritance Tax purposes, with one exception.

That exception concerns certain discretionary trust charges, if the lifetime transfer was chargeable to tax when made (it was not a potentially exempt transfer). It is not disregarded for the purpose of any ten yearly charges (IHTM42081) or proportionate charges (IHTM42110) under IHTA84/S64 or IHTA84/S65 that arose before the transferor’s death.