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Contents

Official guidance

Inheritance Tax Manual

IHTM04000 · How Inheritance Tax is charged

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IHTM04001 · Summary
IHTM04010 · History
IHTM04021 · Structure of the charge: main charging provisions
IHTM04022 · Structure of the charge: how a disposition becomes a chargeable transfer
IHTM04023 · Structure of the charge: what is a disposition?
IHTM04024 · Structure of the charge: what is a transfer of value?
IHTM04025 · Structure of the charge: what is a deemed transfer of value?
IHTM04026 · Structure of the charge: what is an exempt transfer?
IHTM04027 · Structure of the charge: what is a chargeable transfer?
IHTM04028 · Structure of the charge: what is the value transferred?
IHTM04029 · Structure of the charge: what makes up a person's estate?
IHTM04030 · Structure of the charge: what is property?
IHTM04031 · Structure of the charge: what is meant by beneficially entitled?
IHTM04032 · Structure of the charge: how the meaning of estate is extended
IHTM04033 · Structure of the charge: how meaning of estate is restricted
IHTM04034 · Structure of the charge: what is a general power?
IHTM04035 · Structure of the charge: what is general power property?
IHTM04036 · Structure of the charge: Dormant Asset Scheme
IHTM04041 · Transfers on death: the charging provisions
IHTM04042 · Transfers on death: deemed transfer on death
IHTM04043 · Transfers on death: what makes up the estate on death
IHTM04044 · Transfers on death: what is the value transferred on death?
IHTM04045 · Transfers on death: valuing property together
IHTM04046 · Transfers on death: changes in value by reason of the death
IHTM04051 · Lifetime transfers: the charging provisions
IHTM04052 · Lifetime transfers: what is a person?
IHTM04053 · Lifetime transfers: what is an individual
IHTM04054 · Lifetime transfers: the loss to the transferor’s estate
IHTM04055 · Lifetime transfers: loss to estate greater than the value of property given
IHTM04056 · Lifetime transfers: loss to estate less than value of property given
IHTM04057 · Lifetime transfers: what is a potentially exempt transfer?
IHTM04058 · Lifetime transfers: when is a gift made to another individual or to a specified trust?
IHTM04059 · Lifetime transfers: when does property become comprised in the estate of an individual?
IHTM04060 · Lifetime transfers: when is the estate of another individual increased?
IHTM04061 · Lifetime transfers: transfers that cannot be potentially exempt transfers
IHTM04062 · Lifetime transfers: woodlands subject to a deferred Estate Duty charge
IHTM04063 · Lifetime transfers: deemed transfers that are potentially exempt transfers
IHTM04064 · Lifetime transfers: deemed potentially exempt transfers
IHTM04065 · Lifetime transfers: purchase of a policy linked with an annuity
IHTM04066 · Lifetime transfers: what is the value transferred by a potentially exempt transfer?
IHTM04067 · Lifetime transfers: what is an immediately chargeable transfer?
IHTM04068 · Lifetime transfers: transfer of value by a close company
IHTM04069 · Lifetime transfers: alteration in the share capital of a close company
IHTM04070 · Lifetime transfers: what is the value transferred by an immediately chargeable transfer?
IHTM04071 · Lifetime transfers: introduction to gifts with reservation of benefit
IHTM04072 · Lifetime transfers: the charging provisions for gifts with reservation of benefit
IHTM04073 · Lifetime transfers: what is the value transferred by a gift with reservation of benefit?
IHTM04081 · Settled property: introduction
IHTM04082 · Settled property: the charging provisions for an interest in possession trust on death
IHTM04083 · Settled property: the charging provisions for an interest in possession trust during lifetime
IHTM04084 · Settled property: the charge where an interest in possession comes to an end
IHTM04085 · Settled property: the charge where an interest in possession is disposed of.
IHTM04086 · Settled property: the charge where the value of settled property is reduced
IHTM04087 · Settled property: changes to settled property where IHT is not charged on an interest in possession trust
IHTM04088 · Settled property: the charge where an interest in possession comes to an end following a potentially exempt transfer
IHTM04089 · Settled property: the charge when both a close company and interest in possession are involved
IHTM04090 · Settled property: transfer by a close company apportioned to trustees
IHTM04091 · Settled property: alteration in a close company’s capital apportioned to trustees
IHTM04092 · Settled property: the charge where a close company is entitled to an interest in possession
IHTM04093 · Settled property: what is the value transferred when an interest in possession ceases?
IHTM04094 · Settled property: other valuation issues when an interest in possession ceases
IHTM04095 · Settled property: the charging provisions for discretionary trusts
IHTM04096 · Settled property: charges on property held in relevant property trusts
IHTM04097 · Settled property: what is value of property held in discretionary trusts on which tax is charged?
IHTM04098 · Settled property: charges on special trusts
IHTM04099 · Settled property: charges on accumulation and maintenance trusts
IHTM04100 · Settled property: charges on employee and newspaper trusts
IHTM04101 · Settled property: charges on protective trusts
IHTM04102 · Settled property: charges on trusts for disabled persons
IHTM04103 · Settled property: charges on temporary charitable trusts
IHTM04104 · Settled property: maintenance funds for historic buildings
IHTM04111 · Heritage property: summary
IHTM04112 · Heritage property: when a charge to tax arises
IHTM04113 · Heritage property: chargeable events under IHTA84/S32
IHTM04114 · Heritage property: exceptions to the charge under IHTA84/S32
IHTM04115 · Heritage property: chargeable events under IHTA84/S32A
IHTM04116 · Heritage property: exceptions to the charge under IHTA84/S32A
IHTM04117 · Heritage property: special situations
IHTM04118 · Heritage property: double charges
IHTM04121 · Woodlands: Summary
IHTM04122 · Woodlands: the deferred charge
IHTM04141 · Provisions which exclude the Inheritance Tax Act
IHTM04151 · Dispositions that are not transfers of value: introduction
IHTM04200 · Dispositions by close companies for the benefit of employees
IHTM04210 · Waiver or repayment of an amount of remuneration
IHTM04220 · Waiver of dividends
IHTM04230 · Grant of an agricultural tenancy
IHTM04240 · Changes in the distribution of the deceased's estate
IHTM04250 · Refund to trustees of Income Tax repayments received by settlor
IHTM04161 · Dispositions not intended to confer bounty: outline of IHTA84/S10
IHTM04162 · Dispositions not intended to confer bounty: application of the relief
IHTM04163 · Dispositions not intended to confer bounty: IHTA84/S10 qualified or excluded
IHTM04164 · Dispositions not intended to confer bounty: definitions
IHTM04165 · Dispositions not intended to confer bounty: first condition - gift not intended
IHTM04166 · Dispositions not intended to confer bounty: second condition - arm's length transaction
IHTM04167 · Dispositions not intended to confer bounty: application to settled property
IHTM04171 · Dispositions for the maintenance of the transferor’s family: outline of IHTA84/S11
IHTM04172 · Dispositions for the maintenance of the transferor's family: definitions
IHTM04173 · Dispositions for the maintenance of the transferor's family: maintenance of a spouse or civil partner
IHTM04175 · Dispositions for the maintenance of the transferor's family: maintenance of the transferor's children
IHTM04176 · Dispositions for maintenance of the transferor's family: maintenance of other people's children
IHTM04177 · Dispositions for the maintenance of the transferor’s family: care or maintenance of a dependent relative
IHTM04178 · Dispositions for the maintenance of the transferor’s family: meaning of a dependent relative
IHTM04179 · Dispositions for maintenance of the transferor's family: meaning of incapacity
IHTM04180 · Dispositions for maintenance of the transferor's family: dispositions satisfying IHTA84/S11 in part
IHTM04181 · Dispositions for the maintenance of the transferor's family: application to settled property
IHTM04191 · Dispositions allowable for income tax or conferring retirement benefits: outline of IHTA84/S12
IHTM04192 · Dispositions allowable for income tax or conferring retirement benefits: deductions allowable for income tax
IHTM04193 · Dispositions allowable for income tax or conferring retirement benefits: provision by employers for employee's retirements
IHTM04251 · Excluded property: introduction
IHTM04260 · Foreign `unsettled` property
IHTM04261 · Savings of individuals domiciled in Channel Islands or Isle of Man - transfers before 6 April 2025
IHTM04262 · Holdings in Open Ended Investment Companies (OEICs) and Authorised Unit Trusts (AUTs)
IHTM04263 · Decorations, medals and awards
IHTM04271 · Foreign settled property: introduction
IHTM04272 · Foreign settled property: when the settlement was made
IHTM04273 · Foreign settled property
IHTM04274 · Foreign settled property: identifying settled property
IHTM04281 · Reversionary interests: introduction
IHTM04282 · Reversionary interests: purchased reversions
IHTM04283 · Reversionary interests: reversion under own or spouse's/civil partners's settlement
IHTM04284 · Reversionary interests: lease for life
IHTM04285 · Reversionary interests: interest subject to an annuity
IHTM04286 · Reversionary interests: reversions and foreign issues
IHTM04291 · Government securities in foreign ownership: introduction
IHTM04293 · Government securities in foreign ownership: exclusion from charge to IHT
IHTM04294 · Government securities in foreign ownership: type of security and ownership
IHTM04295 · Government securities in foreign ownership: ordinary residence
IHTM04296 · Government securities in foreign ownership: domicile
IHTM04297 · Government securities in foreign ownership: close company with an interest in possession
IHTM04298 · Government securities in foreign ownership: relevant property trusts and FOTRA gilts
IHTM04299 · Government securities in foreign ownership: conversion to FOTRA gilts and the relevant property trust charge
IHTM04300 · Government securities in foreign ownership: anti- avoidance provisions
IHTM04301 · Government securities in foreign ownership: exclusion of interest on FOTRA gilts
IHTM04302 · Government securities in foreign ownership: exclusion of repayment of Income Tax on FOTRA gilts
IHTM04303 · Government securities in foreign ownership: reversionary interest in FOTRA gilts
IHTM04304 · Government securities in foreign ownership: FOTRA gilts in unadministered estates
IHTM04305 · Government securities in foreign ownership: FOTRA gilts as partnership assets
IHTM04306 · Government securities in foreign ownership: list of FOTRA securities in issue at 5 April 1998
IHTM04321 · Property of visiting forces: introduction
IHTM04322 · Property of visiting forces: qualifying persons
IHTM04323 · Property of visiting forces: protection of residence and domicile
IHTM04324 · Property of visiting forces: designated countries
IHTM04331 · Value left out of account: introduction
IHTM04360 · Settled property to which the settlor's spouse, civil partner, widow(er) or surviving civil partner is entitled
IHTM04380 · Value left out of account: foreign currency bank accounts
IHTM04390 · Value left out of account: overseas pensions
IHTM04410 · Value left out of account: interest in possession as remuneration for services as trustee
IHTM04341 · Estate Duty surviving spouse exemption: summary
IHTM04343 · Estate Duty surviving spouse exemption: application on death
IHTM04344 · Estate Duty surviving spouse exemption: application to lifetime events
IHTM04345 · Estate Duty surviving spouse exemption: procedures where relief is due
IHTM04346 · Estate Duty surviving spouse exemption: procedures where relief is not due
IHTM04351 · Reverter to settlor: introduction
IHTM04352 · Reverter to settlor: limitations on the relief
IHTM04353 · Reverter to settlor: statutory restrictions on relief
IHTM04371 · Woodlands: introduction
IHTM04373 · Woodlands: the conditions for relief
IHTM04374 · Woodlands: the death estate
IHTM04375 · Woodlands: the election
IHTM04376 · Woodlands: beneficial entitlement under special types of interest
IHTM04377 · Woodlands: European Economic Area (EEA) - deaths on or after 22 April 2009
IHTM04421 · Compensation for wrongs suffered during World War II: ex-gratia payment to Britons held as prisoners of war by the Japanese
IHTM04422 · Compensation for wrongs suffered during World War II: payments to slave or forced labourers or other victims of the German Nationalist Socialist (Nazi) regime
IHTM04423 · Compensation for wrongs suffered during World War II: how to apply the relief
IHTM04441 · Legal background: the concept of beneficial ownership (England, Wales & Northern Ireland)
IHTM04442 · Legal background: connected persons
IHTM04470 · Legal background - the meaning of property
IHTM04451 · Estate Duty surviving spouse exemption: introduction
IHTM04452 · Estate Duty surviving spouse exemption: duty treated as paid in full on the first death
IHTM04453 · Estate Duty surviving spouse exemption: restriction on exemption because of non-payment of duty
IHTM04454 · Estate Duty surviving spouse exemption: part of fund not dutiable on the first death
IHTM04455 · Estate Duty surviving spouse exemption: treatment of income
IHTM04456 · Estate Duty surviving spouse exemption: payment of duty ‘in respect of’ any ‘settled property’ since the date of ‘the settlement’
IHTM04457 · Estate Duty surviving spouse exemption: meaning of competent to dispose
IHTM04458 · Estate Duty surviving spouse exemption: powers where the person is competent to dispose
IHTM04459 · Estate Duty surviving spouse exemption: powers where the person is not competent to dispose
IHTM04460 · Estate Duty surviving spouse exemption: powers exercisable by will or by deed
IHTM04461 · Estate Duty surviving spouse exemption: power to appropriate capital
IHTM04462 · Estate Duty surviving spouse exemption: benefits under intestacy (England & Wales)
IHTM04463 · Estate Duty surviving spouse exemption: benefits under intestacy and legal rights (Scotland)
IHTM04464 · Estate Duty surviving spouse exemption: examples for competency to dispose
IHTM04465 · Estate Duty surviving spouse exemption: meaning of parties to a marriage
IHTM04311 · Schedule A1/IHTA 84: UK residential property and UK agricultural property
IHTM04312 · Schedule A1/IHTA84: close companies and partnership examples
IHTM04313 · Para 3 & 4/Schedule A1/IHTA84 relevant loan examples
IHTM04314 · Finance (No 2) Act 2017: disposals of company interests, partnership interests, relevant loans and repayments of relevant loans
IHTM04315 · Para 7/Sch A1/IHTA84: double taxation arrangements
IHTM04316 · Para 6/Schedule A1/IHTA84: targeted anti-avoidance rule and s237(2A)/IHTA: Inland Revenue charge
IHTM04317 · Para 20/Schedule 12/Finance Bill 2026: commencement provisions
IHTM04142 · Scheme Payments
IHTM04174 · Dispositions for the maintenance of the transferor's family: maintenance of children
IHTM04342 · Estate Duty surviving spouse exemption: entitlement to relief
IHTM04378 · Woodlands: European Economic Area (EEA) - retrospective application for deaths before 22 April 2009

Inheritance Tax Manual
How Inheritance Tax is charged: contents

IHTM04142 | Scheme Payments

From HM Revenue & Customs · Inheritance Tax Manual

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