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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: dating of dispositions: introduction

The Inheritance Tax legislation does not contain special rules concerning the dating of dispositions. They must therefore be ascertained in accordance with the general law.

The date of a disposition is important because it may affect

  • the accounting period in which the transfer falls,
  • the due date of payment of tax,
  • the order of dispositions made on the same day (IHTM14591) or within a short period (and the allocation of exemptions that may be given against the appropriate disposition).

Many dispositions will present no problem but where, for instance, transactions are not completed by delivery or where the gift is made into trust (see Choithram International SA v Pagarini [2001] 2 All ER 492), it may be necessary to determine the exact time at which legally enforceable rights pass from the transferor to the transferee. The time at which a disposition actually becomes effective is the appropriate time to adopt for Inheritance Tax purposes.

The strict legal position for some of the basic types of dispositions is summarised briefly in the following pages.