This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Inheritance Tax Manual

Proportionate charges: chargeable transfer

The property comprising the chargeable transfer (value now chargeable) is the value of the ‘loss to the settlement’. That is the amount by which the value of the relevant property in the settlement is less immediately after the event than it was before. (IHTM42119)

  • Deduct any appropriate business or agricultural relief from the value
  • Gross-up the value if the tax is to be paid out of the remaining settlement funds. (IHTM42118)

The rate to apply to the transfer depends on whether the transfer is before or after the first TYA.

Once you have found the effective rate, the calculation is then reduced by a number of 40ths, to take into account the length of time in quarter years that the property has been in the trust since set-up or the last TYA.