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IHTM26155 | Step 4 - four stage grossing calculations: stage 3

From HM Revenue & Customs · Inheritance Tax Manual

Continuing using the lettering of paragraphs started at , the procedure for the third stage () (re-grossing the tax-free specific gifts) is as follows:

G: Calculate the tax on the chargeable estate arrived at in paragraph F of

  • taking account of the nil-rate band and any lifetime cumulative total (IHTM14501), but

  • ignoring any property chargeable at a separate title ()

H: Find the value of the chargeable estate net of tax by deducting the tax at G from the value at F.

I: Re-gross the specific gifts not bearing their own tax using the formula

Value of specific gift not bearing their own tax (at their original value as reduced by interaction ()) × (Gross value of chargeable estate (from F at ) ÷ Value of chargeable estate net of tax (from H))