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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Reduced rate for gifts to charity: elections: who must make the election

An election to either merge components under IHTA84/Sch1A/Para 7 (IHTM45035) or to opt out of the reduced rate (IHTM45040) under IHTA84/Sch1A/Para 8 must be made by the ‘appropriate persons’. This is defined in IHTA84/Sch1A/Para 9(6) for each of the three estate components (IHTM45003) as follows

  • for the survivorship component (IHTM45004), the appropriate persons means all those to whom the property passing by survivorship or under a special destination in Scotland passes on the deceased’s death. If a joint owner has died before an election is made, their personal representatives can join the election in their place,
  • for the settled property component (IHTM45005), the appropriate persons are the trustees of all the settled property that makes up the component,
  • for the general component (IHTM45007), the appropriate persons are the deceased’s personal representatives. In the rare case that no grant of representation has been taken out, the appropriate persons are all those liable for the tax attributable to the property that makes up the component, and
  • for property in which a reservation of benefit subsists (IHTM45006) the appropriate persons are all those in whom the gifted property is vested, whether beneficially or otherwise.

You should make sure that an election is correctly made by all the appropriate people.