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HMRC internal manual

Inheritance Tax Manual

Settled property: Quick Succession Relief

If there are two successive charges on the settled property within a period of five years the tax payable on the second charge is reduced, and the reduction is a percentage of the tax payable on the earlier transfer - IHTA84/S141.

To qualify for the relief

  • the second settled property charge must arise on the termination of an interest in possession, and
  • the first such charge must have increased the estate of the life tenant who was the holder of that interest and be determined by reference to the same settled property. (This second condition means in effect that, where the life tenant’s interest arose on or after 22 March 2006, it must be an immediate post-death interest, a disabled person’s interest or a transitional serial interest (IHTM16061) and thus increased his estate for Inheritance Tax (IHT) purposes).

This condition is satisfied if the earlier charge was an IHT charge on a relevant property (IHTM42161) trust, or was the lifetime charge on the transfer into the settlement. There are further details of this relief at IHTM22041.