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HMRC internal manual

Inheritance Tax Manual

Quick succession relief: when the relief does not apply

There can be no quick succession relief (QSR) (IHTM22041) where the earlier transfer to the deceased was:

  • exempt
  • chargeable but no tax was payable because it was below the threshold, or
  • more than five years before the death.
  • no tax is payable on the deceased’s death estate because it is
  • wholly exempt, or
  • chargeable but the aggregate of the chargeable transfers (IHTM04027) (including the transfer on death) is below the threshold.

Example 1

Thomas died in June 2007 leaving an estate of £650,000. By Will, the whole estate passes equally to the spouse, Kira, and a child, Clare. Half the estate was spouse exempt. Tax of £10,000 was paid on the chargeable transfer of the other half.

Kira dies in 2010. There can be no QSR on her death by reference to the tax paid on Thomas’s death because the transfer to Kira was an exempt transfer.

Even where there are two chargeable transfers within 5 years, there is no QSR if, between the two transfers, there is an intervening exempt transfer, as shown in example 2.

Example 2

Angela died in March 2006 leaving an estate of £300,000. By Will, her whole estate passes to her brother Gregory. Tax was paid on the chargeable transfer.

Gregory died in October 2008. By Will, his whole estate passes to his spouse Sandra. The transfer on Gregory’s death is wholly exempt so there can be no QSR.

Sandra dies in August 2010. Her estate was increased by the exempt transfer on the death of Gregory, not by the chargeable transfer on the death of Angela. So there can be no QSR on Sandra’s death by reference to the tax paid on Angela’s death, even though the interval between the deaths of Angela and Sandra is less than 5 years and the whole of Angela’s estate may be reflected in that of Sandra.

In such a case you must deny QSR.