IHTM26154 - Step 4 - four stage grossing calculations: stage 2

The procedure for stage 2 of the four-stage grossing (IHTM26152) calculation (making the initial determination of the chargeable estate) is as follows:

A: Find the total value of all the chargeable specific gifts (IHTM26011) by adding together the

• grossed up value at Stage 1 (IHTM26153),
• the total value of any chargeable specific gifts which do bear their own tax (IHTM26123).

Remember to

• confine the list to specific gifts at the same title (IHTM26211),
• reduce the value of the specific gifts as appropriate under the interaction (IHTM26103) rules to reflect any Business Relief or Agricultural Relief allowed.

B: Find the total value of all the specific gifts by adding together

• the total value of all the chargeable specific gifts at A above,
• the total value of any exempt specific gifts.

The reminder at A also applies here.

C: Deduct the total of the specific gifts at B above, from the value of the estate for Inheritance Tax purposes (the value transferred (IHTM04044)) at that title to find the initial value of residue (IHTM26003).

D: Calculate the part of residue which is exempt.

E: Deduct the exempt part of residue from the total residue to find the chargeable part of residue.

F:Make the initial determination of the chargeable estate by adding together

• the total at A above, of the chargeable specific gifts,
• the chargeable residue from E.