Chapter: 2 - Inheritance Tax Mitigation: The Basics

Reliefs

2.1.6

A transfer of value may be a chargeable transfer, though in computing the value transferred may attract a relief.  The principal reliefs (whether given at 100% or at 50%) are for qualifying business and agricultural property, considered at 2.5 in summary and at 6.2 and 7.2 in more detail (IHTA 1984 ss103-113B for business property relief (BPR) and ss115-124C for agricultural property relief (APR)).

A very limited deferral relief is given to woodlands insofar as they do not attract relief as agricultural or business property (IHTA 1984 ss125-130): see 7.4.

A relief called informally ‘quick succession relief’ or QSR is given where property is subject to two or more chargeable transfers within a five year period (IHTA 1984 s141), the second or latest transfer occurring usually on death.  In that event the tax chargeable on the second transfer is reduced by a percentage of tax charged on the first, on a sliding scale depending upon the period elapsing between the two transfers: see 18.1.2.

A particular relief (albeit not expressed as such) is given on post-death events (considered in more detail at 2.13.2 and in Chapter 19).    For example, where a Will creates a ‘relevant property’ trust, an appointment by the trustees within two years after the death escapes the normal ‘exit’ charge (IHTA 1984 s144).

Relief may be given under a double tax treaty or, as ‘unilateral relief’, where in the absence of a treaty tax similar to IHT is charged on the asset in that jurisdiction (IHTA 1984 ss158 and 159).