IHTM26106 - Step 3 - interaction: specific gifts of relievable property

A specific gift (IHTM26011) of relievable property is a straightforward gift under which the beneficiary receives the relievable property, such as 鈥榤y interest in the XYZ partnership to Ben absolutely鈥�. There are separate instructions dealing with gifts that are not straightforward (IHTM26107).

The value of a straightforward gift of relievable property is the value of that property after relief.

Example

  • John鈥檚 estate passes by Will:拢600,000 including unlisted shares worth 拢200,000.
  • Those shares qualify for business relief (IHTM25131) at 100%.
  • Specific gift of unlisted shares to a child.
  • Residue equally to spouse and child.

Applying the stages (IHTM26104) for calculating the chargeable estate

Stage 1

The value transferred after business relief is 拢400,000.

Stage 2

There is a specific gift of relievable property - the unlisted shares. This gift is taken at its value after relief, which is nil.

Stage 3

No action necessary.

Stage 4

There is no value to gross up (IHTM26121).

Stage 5

Calculate the residue using the reduced values.

Value transferred of 拢400,000 less specific gift (nil) = 拢400,000 (residue).

Stage 6

The chargeable estate is half the residue = 拢200,000.