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Exit charge


Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Exit charge


Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
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This guidance note explains how to calculate the inheritance tax payable when an exit charge arises on or after 18 November 2015. The former method of calculation is outlined in the Calculation of exit charge before 18 November 2015 guidance note with a summary of the changes given below.

The exit charge

When trust property ceases to be relevant property, it becomes subject to a charge to inheritance tax. This charge is known as either:

  1. •

    the exit charge

  2. •

    the proportionate charge

IHTA 1984, s 65

See the Relevant property guidance note for an explanation of what relevant property is.

The comments on obtaining valuations in the Principal (10-year) charge guidance note apply equally here.

As explained in the Principal (10-year) charge guidance note, relevant property is subject to a principal charge on each 10th anniversary after the trust was created. If property leaves the trust, it will escape the charge on the next 10-year anniversary, although it will have been relevant property for part of the 10-year period. To compensate for

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  • 24 Oct 2024 12:10

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