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HMRC internal manual

Inheritance Tax Manual

Step 4 - four stage grossing calculations: stage 3

Continuing using the lettering of paragraphs started at IHTM26154, the procedure for the third stage (IHTM26152) (re-grossing the tax-free specific gifts) is as follows

  1. Calculate the tax on the chargeable estate arrived at in paragraph f of IHTM26154
* taking account of the nil rate band and any lifetime cumulative total (IHTM14501), but
* ignoring any property chargeable at a separate title ([IHTM26211](
  1. Find the value of the chargeable estate net of tax by deducting the tax at g from the value at f.
  2. Re-gross the specific gifts not bearing their own tax using the formula

Value of specific gift not bearing their own tax (at their original value as reduced by interaction (IHTM26101)) × Gross value of chargeable estate (from f at IHTM26154)

Value of chargeable estate net of tax (from h.)