IHTM14141 | Lifetime transfers: annual exemption: summary

A person’s lifetime transfers are exempt up to a total of £3,000 in an income tax year - 6 April to 5 April the following year.

The exemption applies to

• lifetime transfers by individuals (IHTM04053)

• the lifetime termination of an interest in possession (IHTM16060) in settled property, and

• apportionments made to persons under IHTA84/S94 (transfers by close companies). (IHTM14851)

The exemption does not apply to the deemed potentially exempt transfer (PET) under FA 86/102(4) and FA86/103(5)

If a transfer of value (IHTM04024)) is more than the amount of the available exemption:

• it is an exempt transfer (IHTM04026) up to the amount of the available exemption (IHTA84/S2 (2))

• the excess is the chargeable amount of the PET (IHTM04057) or immediately chargeable transfer (IHTM04027).