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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Proportionate charges: introduction

Full charging provisions at IHTM04096 and IHTM04097.

Essentially, there is an ‘exit charge’ for inheritance tax under IHTA84/S65 when there is a distribution or disposition of some part of the relevant property trust.

The calculation is based on 3/10 of the lifetime rate of inheritance tax (half death rates), currently 20%. So the maximum rate is 6% (as for TYA charges).

The rate calculations depend on whether the exit charge arises before or after the first ten year anniversary.