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Clawback of APR on death


Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
tag-icon Autumn Budget 2024

Clawback of APR on death


Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
tag-icon Autumn Budget 2024
imgtext

Where farmland has been transferred as a lifetime gift there can be clawback of the APR where the donor dies within seven years of the gift. When calculating the inheritance tax charge on death, all lifetime gifts within the last seven years must be brought into account.

APR on death following a lifetime gift

When an individual has made transfers within seven years of his death:

  1. •

    an additional charge will be levied at the time of his death if the transfer was a chargeable lifetime transfer (CLT).

    If the amount of the transfer was reduced by APR, the additional charge to tax is levied on the reduced amount.

  2. •

    inheritance tax will be charged for the first time if the transfer during his lifetime was a potentially exempt transfer (PET).

    The amount of the transfer is reduced by APR before the charge is levied, but only if the transfer qualified for APR at the time of the PET.

See the Agricultural property relief (APR) guidance note.

However, in both

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  • 01 Nov 2024 07:11

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