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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Quick succession relief: when the relief applies

For tax on the deceased’s death estate to be reduced by quick succession relief (QSR) (IHTM22041) there must be

  • an earlier chargeable transfer (IHTM04027)
  • within five years of the death
  • on which tax was (or becomes) payable, and
  • the chargeable transfer must have increased the deceased’s estate.

The earlier chargeable transfer can be

  • on death
  • a lifetime transfer chargeable when made (IHTM04067)
  • a failed potentially exempt transfer (IHTM0457), or
  • of settled property (IHTM16000) whether held on interest in possession (IHTM16061) or discretionary trusts.

Example

Manish died in March 2008 leaving an estate of £350,000. By Will his whole estate passed to a child, Dinesh. Tax of £20,000 was paid.

Dinesh dies in 2010. QSR is due on Dinesh’s death if his estate is also taxable.

The assets the deceased received under the earlier transfer need not be included in the deceased’s death estate for the QSR to be due. But if a comparison of the deceased’s free estate (IHTM04029) and the earlier transfer suggests there may be undisclosed lifetime gifts you must consider whether an enquiry is appropriate.