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
- Find the total value of all the chargeable specific gifts (IHTM26011) by adding together the
- grossed up value at Stage 1 (IHTM26003), and
- total value of any chargeable specific gifts which do bear their own tax (IHTM26123)
* confine the list to specific gifts at the same title ([IHTM26211](https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm26211)), and * reduce the value of the specific gifts as appropriate under the interaction ([IHTM26103](https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm26103)) rules to reflect any BR or AR allowed
- Find the total value of all the specific gifts by adding together
* the total value of all the chargeable specific gifts at a., above, and * the total value of any exempt specific gifts
The reminder at a. also applies here.
- Deduct the total of the specific gifts at b., above, from the value of the estate for IHT purposes (the value transferred (IHTM04044)) at that title to find the initial value of residue (IHTM26003).
- Calculate the part of residue which is exempt.
- Deduct the exempt part of residue from the total residue to find the chargeable part of residue.
- Make the initial determination of the chargeable estate by adding together
* the total at a., above, of the chargeable specific gifts, and * the chargeable residue from e.