IHTM04161 | Dispositions not intended to confer bounty: outline of IHTA84/S10
From HM Revenue & Customs · Inheritance Tax Manual
provides that a disposition () is not a transfer of value () if it is shown that two conditions are satisfied. The words ‘if it is shown’ put the burden of proof on the person who contends that the disposition satisfies the conditions. The two conditions are
that the disposition was not intended, and was not made in a transaction intended, to confer any gratuitous benefit () on any person, and
that either:
it was made in a transaction at arm’s length () between persons not connected with each other, or
it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.
The use of the word person () enables the subsection to apply to dispositions to companies.
does not apply directly to the deemed transfer of value () on the lifetime termination of an interest in possession () in settled property. But it is relevant in considering the application of to transactions between trustees and beneficiaries, etc which reduce the value of trust property ().
The provisions are also imported by to a limited extent to charges on special trusts () under the discretionary trust regime.
And there are two situations where the application of is qualified or excluded. ()