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HMRC internal manual

Inheritance Tax Manual

Pre-owned assets: calculation of the charge on intangibles: valuation date

FA04/Sch15/Para 9(2) provides the authority for regulations to be made to specify that a valuation of the intangible property may be by reference to an earlier valuation date. Unlike the charge on land (IHTM44010) and chattels (IHTM44016), SI2006/724 The Charge To Income Tax By Reference To Enjoyment of Property Previously Owned Regulations do not contain any such provisions so the settled funds must be valued on the valuation date for each tax year. The valuation date is 6 April in each year, or the date that the taxpayer first becomes liable to the POA charge in the year concerned, SI2006/724/Art 2.

Following on from the example at IHTM44025, the chargeable amount will vary each year by reference to the value of the funds and the prescribed rates shown below

  • 06/07 value of funds £1,200,000; prescribed rate 5%; chargeable amount £60,000
  • 07/08 value of funds £1,400,000; prescribed rate 6.25%; chargeable amount £87,500
  • 08/09 value of funds £1,300,000; prescribed rate 6.25%; chargeable amount £81,250.

The amount actually subject to the POA charge will depend on the income tax and CGT actually payable by Andrew.