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HMRC internal manual

Inheritance Tax Manual

Successive transfers: Limitation of relief

When the successive transfer provisions (IHTM25331) apply there are two limits on business relief contained in IHTA84/S109 (2) and IHTA84/S109 (3).

  • IHTA84/S109 (2) applies when the property within IHTA84/S109(1)(c) is replacement property. When this is the case, IHTA84/S109(2) restricts business relief by providing that the relief shall not exceed what it would have been had the replacement or any one or more of the replacements not been made. For further information see IHTM25313.

 Your approach to IHTA84/S109(2) should be similar to that to replacement property (IHTM25313) generally.

  • IHTA84/S109(3) applies if the earlier transfer was a part-purchase, so that only a proportion of the property was reflected in the value transferred by that transfer. The relief is restricted to the same proportion.