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HMRC internal manual

Inheritance Tax Manual

Step 4 - simple grossing calculations: introduction

The simple grossing up calculation can be used only when the circumstances outlined at IHTM26131 apply. If they do the calculation can be used whether or not

  • there are any exempt specific gifts at the same title, or
  • there is also chargeable property at a different title

Where the only chargeable gifts are specific gifts not bearing their own tax and there are no reliefs against tax (IHTM26129), you should gross up the gifts at the rate appropriate to their total value. The way you do this depends on whether there is any lifetime cumulation to take into account and so the calculation varies slightly depending on whether there is

  • no lifetime cumulation (IHTM26142)
  • a lifetime cumulation below the threshold (IHTM26143), or
  • a lifetime cumulation above the threshold (IHTM26144)

The examples used to illustrate the calculation assume a date of death after 15 March 1988, when the simplified scale of rates on death of nil up to the threshold and 40% on the excess were introduced. The grossing calculation on deaths before that date is more complicated because there are more rates to take into account. Details are given on the various grossing tables which are available to caseworkers.