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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Step 1 - the starting value of specific gifts: introduction

Where a specific gift (IHTM26011) is of an asset in the deceased’s estate, the starting value of the gift is normally the same as the value of the asset for Inheritance Tax purposes on the death. But IHTA84/S42 (1) refers to the benefit of the gift. So, the focus is on the value of the gift to the beneficiary and this may result in circumstances where the value of the gifted property is not straightforward.

Situations where the value of the property given (when valued separately) may not be the same as its value as part of the deceased’s estate are where

  • an asset in the estate is disposed of by two or more gifts (IHTM26082)
  • the related property (IHTM09731) provisions apply, or
  • where ownership of an asset is split between different funds (IHTM26003) - for example half in the free estate and half in settled property (IHTM16000)

You should refer to Technical for advice if you have to value a specific gift of an asset in the estate, and the value of that asset (when valued by itself) is different from its value as part of the death estate (except where the asset is disposed of by two or more gifts).