IHTM31440 | Assessing: calculations: lifetime events: chargeable PETs and additional charges

Once you have worked out the chargeable value of a failed potentially exempt transfer (PET) (IHTM14512) or additional charge (IHTM14571),

• add the previous lifetime cumulative transfers (PLCT) (IHTM14502).

Then

• deduct the IHT nil-rate band, and multiply the remainder by the appropriate rate of tax (40% unless the transfer is before 18 March 1988 (IHTM30171)).

Apportion and deduct any tax attributable to previous lifetime transfers, leaving the tax due on the transfer itself.

Taper relief

Deduct any taper relief (IHTM14611) due. COMPASS (IHTM31101) will calculate this automatically, but you must amend a manual calculation template yourself.

Adjusting additional charges

If you are calculating additional charges on an immediately chargeable transfer, deduct the tax paid (IHTM14576) on the transfer at the time it was made. Show this as a 'relief against tax' in the appropriate box on your COMPASS (IHTM31189) or manual template calculation.

Next action

You will now have the total tax charge for this lifetime transfer. You can follow the death estate instructions for the further aspects to consider.

• Revision to the original tax charge (IHTM31416)

• IOP cases (IHTM31418)

• Tax previously paid (IHTM31419) (relating to this chargeable occasion only)

• Interest (IHTM31420)