IHTM11176 - Exclusions from exemption: gift less than donor鈥檚 whole interest or for a limited period

Under IHTA84/S23 (3) a gift to a charity (IHTM11112) is not exempt if the property given is an interest in other underlying property and either

  • that interest is less than the donor鈥檚 full interest (this must be established at a time twelve months after the transfer), or
  • the property is given for a limited period

This exception does not apply simply because the gift is an undivided share of the property.

听

Example

Joseph owned the freehold interest in the whole of Hall Farm.

The effect of IHTA84/S23 (3) on possible alternative gifts by will (IHTM12041) is:

  • a gift of a half share of Hall Farm to a charity: IHTA84/S23 (3) does not prevent the exemption applying
  • a gift of a leasehold interest to a charity: IHTA84/S23 (3) prevents the exemption from applying.

But if Joseph had owned only a leasehold interest in Hall Farm and had given the whole of that leasehold interest to the charity, IHTA84/S23 (3) would not have prevented the exemption from applying.

听