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HMRC internal manual

Inheritance Tax Manual

Definition and extent of liability (lifetime transfers chargeable when made): limitation on spouse's or civil partner's liability

The extent of the spouse’s or civil partner’s (IHTM11032) liability is limited to the least of

  • the transferor’s (IHTM30071) liability
  • the market value of the property acquired as at the time of the spouse or civil partner transfer
  • the market value of the property acquired as at the time of the chargeable transfer under consideration if the property is still then owned by the spouse or civil partner, or the market value on an earlier qualifying sale (as defined in IHTA84/S131 (3) by the spouse or civil partner). This alternative applies only if the spouse or civil partner transfer was the earlier of the two, and if the property acquired is not tangible movable property. The market value in view of IHTA84/S203 (3) is that found by the application of the ‘fall in value relief’ (IHTM14620) provisions of the Act as modified for this purpose by IHTA84/S203 (4).