IHTM06125 | Excepted settlements - proportionate charges
From HM Revenue & Customs · Inheritance Tax Manual
Proportionate charge before first ten year charge
Where a proportionate charge has arisen before the first ten year charge and the settlement passes the general conditions (), it will qualify as an excepted settlement where the value of the notional aggregate chargeable transfer () specified in does not exceed 80% of the nil rate band.
For the purposes of calculating the value of the notional chargeable transfer, no relief that might be due should be deducted and any liabilities that may be deductible from assets in charge should also be ignored.
Proportionate charge between ten year anniversaries
Where a proportionate charge has arisen in between ten year anniversaries and the settlement passes the general conditions (), it will qualify as an excepted settlement where the value of the notional aggregate chargeable transfer () specified in , taking account of IHTA/S69, () does not exceed 80% of the nil rate band.
For the purposes of calculating the value of the notional chargeable transfer, no relief that might be due should be deducted and any liabilities that may be deductible from assets in charge should also be ignored.