Occasions of charge

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This guidance note discusses when a charge to inheritance tax arises. This can be on a lifetime transfer to a non-individual such as a trust or a company, where a transfer is made by a close company which is apportioned to a participator or on death. Trustees are also subject to inheritance tax on an exit of assets from a trust and at ten yearly intervals. The note also considers when a lifetime gift is made and when transfers of value are not chargeable to IHT. It also details what is charged to IHT and the special IHT and succession rules surrounding simultaneous deaths. It outlines when a charge to IHT occurs for settled property and signposts to detailed content for each occasion and type of trust.

When does an IHT liability arise?

The occasions on which a liability to inheritance tax can arise for an individual are:

•
when an individual transfers property into trust during their lifetime
•
when an individual makes an outright gift to a company (that is for no consideration,

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