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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Successions: Introduction

For the purposes of the ownership test (IHTM25301) there are two situations in which the deceased/transferor is treated as being the owner of the business property, IHTA84/S108.

 

 

  1. Where the deceased/transferor became entitled to property on the death of another person, they are treated as having owned it from the date of the other person’s death, IHTA84/S108(a). Business property included in an unadministered residuary estate (IHTM22025) comes within this provision as a result of IHTA84/S91.
     
  2. Where the deceased/transferor became entitled to property on the death of their spouse or civil partner (IHTM11032) they are deemed to have owned the property for any period during which the spouse or civil partner owned it (irrespective of how long they had been married), IHTA84/S108 (b).
     

These rules also apply for the purposes of the replacement property provisions (IHTM25311), but they do not apply to the successive transfer provisions (HTM25331).
 

We accept that a surviving spouse inheriting cash derived from the sale of relevant business property, from a deceased spouse, and then re-invests the proceeds in relevant busness property, has the benefit of the provisions in s107(1) in making that re-investment.