Inheritance Tax Act 1984
PART I GENERAL
Main charges and definitions
1 Charge on transfers.
2 Chargeable transfers and exempt transfers.
3 Transfers of value.
3A Potentially exempt transfers.
4 Transfers on death.
5 Meaning of estate.
6 Excluded property.
Rates
7 Rates.
8 Indexation of rate bands.
8ATransfer of unused nil-rate band between spouses and civil partners
8BClaims under section 8A
8CSection 8A and subsequent charges
9 Transitional provisions on reduction of tax.
Dispositions that are not transfers of value
10 Dispositions not intended to confer gratuitous benefit.
11 Dispositions for maintenance of family.
12 Dispositions allowable for income tax or conferring under pension scheme.
13 Dispositions by close companies for benefit of employees.
14 Waiver of remuneration.
15 Waiver of dividends.
16 Grant of tenancies of agricultural property.
17 Changes in distribution of deceased’s estate, etc.
PART II EXEMPT TRANSFERS
CHAPTER I GENERAL
18 Transfers between spouses or civil partners.
19 Annual exemption.
20 Small gifts.
21 Normal expenditure out of income.
22 Gifts in consideration of marriage or civil partnership.
23 Gifts to charities or registered clubs.
24 Gifts to political parties.
24A Gifts to housing associations.
25 Gifts for national purposes, etc.
26 Gifts for public benefit.
26A Potentially exempt transfer of property subsequently held for national purposes etc.
27 Maintenance funds for historic buildings, etc.
28 Employee trusts.
29 Loans—modifications of exemptions.
29A Abatement of exemption where claim settled out of beneficiary’s own resources.
CHAPTER II CONDITIONAL EXEMPTION
30 Conditionally exempt transfers.
31 Designation and undertakings.
32 Chargeable events.
32A Associated properties.
33 Amount of charge under section 32.
34 Reinstatement of transferor’s cumulative total.
35 Conditional exemption on death before 7th April 1976.
35A Variation of undertakings.
CHAPTER III ALLOCATION OF EXEMPTIONS
36 Preliminary.
37 Abatement of gifts.
38 Attribution of value to specific gifts.
39 Attribution of value to residuary gifts.
39A Operation of sections 38 and 39 in cases of business or agricultural relief.
40 Gifts made separately out of different funds.
41 Burden of tax.
42 Supplementary.
PART III SETTLED PROPERTY
CHAPTER I PRELIMINARY
43 Settlement and related expressions.
44 Settlor.
45 Trustee.
46 Interest in possession: Scotland.
46AContract of life insurance entered into before 22nd March 2006 which on that day is settled property in which interest in possession subsists
46BContract of life insurance entered into before 22nd March 2006 which immediately before that day is property to which section 71 applies
47 Reversionary interest.
47A Settlement power
48 Excluded property.
CHAPTER II INTERESTS IN POSSESSION, REVERSIONARY INTERESTS AND SETTLEMENT POWERS
49 Treatment of interests in possession.
49AImmediate post-death interest
49BTransitional serial interests
49CTransitional serial interest: interest to which person becomes entitled during period 22nd March 2006 to 5th October 2008
49DTransitional serial interest: interest to which person becomes entitled on death of spouse or civil partner on or after 6th October 2008
49ETransitional serial interest: contracts of life insurance
50 Interests in part, etc.
51 Disposal of interest in possession.
52 Charge on termination of interest in possession.
53 Exceptions from charge under section 52.
54 Exceptions from charge on death
54A Special rate of charge where settled property affected by potentially exempt transfer.
54B Provisions supplementary to section 54A.
55A Purchased settlement powers
55 Reversionary interest acquired by beneficiary.
56 Exclusion of certain exemptions.
57 Application of certain exemptions.
57A Relief where property enters maintenance fund.
CHAPTER III SETTLEMENTS WITHOUT INTERESTS IN POSSESSION , AND CERTAIN SETTLEMENTS IN WHICH INTERESTS IN POSSESSION SUBSIST
Interpretation
58 Relevant property.
59 Qualifying interest in possession.
60 Commencement of settlement.
61 Ten-year anniversary.
62 Related settlements.
63 Minor interpretative provisions.
Principal charge to tax
64 Charge at ten-year anniversary.
65 Charge at other times.
Rates of principal charge
66 Rate of ten-yearly charge.
67 Added property, etc.
68 Rate before first ten-year anniversary.
69 Rate between ten-year anniversaries.
Special cases—charges to tax
70 Property leaving temporary charitable trusts.
71 Accumulation and maintenance trusts.
71ATrusts for bereaved minors
71BCharge to tax on property to which section 71A applies
71CSections 71A and 71B: meaning of “bereaved minor”
71DAge 18-to-25 trusts
71ECharge to tax on property to which section 71D applies
71FCalculation of tax charged under section 71E in certain cases
71GCalculation of tax charged under section 71E in all other cases
71HSections 71A to 71G: meaning of “parent”
72 Property leaving employee trusts and newspaper trusts.
73 Pre-1978 protective trusts.
74 Pre-1981 trusts for disabled persons.
74AArrangements involving acquisition of interest in settled property etc
74BSection 74A: supplementary provision
74CInterpretation of sections 74A and 74B
Special cases—reliefs
75 Property becoming subject to employee trusts.
76 Property becoming held for charitable purposes, etc.
Works of art, historic buildings, etc.
77 Maintenance funds for historic buildings, etc.
78 Conditionally exempt occasions.
79 Exemption from ten-yearly charge.
79A Variation of undertakings.
Miscellaneous
80 Initial interest of settlor or spouse or civil partner.
81 Property moving between settlements.
81AReversionary interests in relevant property
82 Excluded property.
83 Property becoming settled on a death.
84 Income applied for charitable purposes.
85 Credit for annual charges under Finance Act 1975.
CHAPTER IV MISCELLANEOUS
86 Trusts for benefit of employees.
87 Newspaper trusts.
88 Protective trusts.
89 Trusts for disabled persons.
89ASelf-settlement by person with condition expected to lead to disability
89BMeaning of “disabled person's interest”
90 Trustees’ annuities, etc.
91 Administration period.
92 Survivorship clauses.
93 Disclaimers.
PART IV CLOSE COMPANIES
Transfers by close companies
94 Charge on participators.
95 Participator in two companies.
96 Preference shares disregarded.
97 Transfers within group, etc.
Alterations of capital, etc.
98 Effect of alterations of capital, etc
Settled property
99 Transfers where participators are trustees.
100 Alterations of capital, etc. where participators are trustees.
101 Companies interests in settled property.
General
102 Interpretation.
PART V MISCELLANEOUS RELIEFS
CHAPTER I BUSINESS PROPERTY
103(1) In this Chapter references to a transfer of value...
104 The relief.
105 Relevant business property.
106 Minimum period of ownership.
107 Replacements.
108 Successions.
109 Successive transfers.
109A Additional requirement in case of minority shareholdings.
110 Value of business.
111 Value of certain shares and securities.
112Exclusion of value of excepted assets.
113 Contracts for sale.
113A Transfers within seven years before death of transferor.
113B Application of section 113A to replacement property.
114 Avoidance of double relief.
CHAPTER II AGRICULTURAL PROPERTY
115 Preliminary.
116 The relief.
117 Minimum period of occupation or ownership.
118 Replacements.
119 Occupation by company or partnership.
120 Successions.
121 Successive transfers.
122 Agricultural property of companies.
123 Provisions supplementary to section 122.
124 Contracts for sale.
124A Transfers within seven years before death of transferor.
124B Application of section 124A to replacement property.
124C Land in habitat schemes.
CHAPTER III WOODLANDS
125 The relief.
126 Charge to tax on disposal of trees or underwood.
127 Amount subject to charge.
128 Rate of charge.
129 Credit for tax charged.
130 Interpretation.
CHAPTER IV TRANSFERS WITHIN THREE YEARS BEFORE DEATH
131 The relief.
132 Wasting assets.
133 Shares—capital receipts.
134 Payments of calls.
135 Reorganisation of share capital, etc.
136 Transactions of close companies.
137 Interests in land.
138 Leases.
139 Other property.
140 Interpretation.
CHAPTER V MISCELLANEOUS
Successive charges
141 Two or more transfers within five years.
Changes in distribution of deceased’s estate, etc.
142 Alteration of dispositions taking effect on death.
143 Compliance with testator’s request.
144 Distribution etc. from property settled by will.
145 Redemption of surviving spouse’s or civil partner's life interest.
146 Inheritance (Provision for Family and Dependants) Act 1975.
147 Scotland; legitim. etc.
Mutual and voidable transfers
148, 149. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
150 Voidable transfers.
Pension schemes, etc
151 Treatment of pension rights, etc.
151APerson dying with alternatively secured pension fund
151BRelevant dependant with pension fund inherited from member over 75
151BARate or rates of charge under section 151B
151CDependant dying with other pension fund
151DUnauthorised payment where person dies over 75 with pension or annuity
151ERate or rates of charge under section 151D
152 Cash options.
153 Overseas pensions.
Armed forces
154 Death on active service, etc.
155 Visiting forces, etc.
Apsley House and Chevening Estate
156 Apsley House and Chevening Estate.
Non-residents’ bank accounts
157 Non-residents’ bank accounts.
Double taxation relief
158 Double taxation conventions.
159 Unilateral relief.
PART VI VALUATION
CHAPTER I GENERAL
160 Market value.
161 Related property.
162 Liabilities.
163 Restriction on freedom to dispose.
164 Transferor’s expenses.
165 Tax on capital gains.
166 Creditors’ rights.
167 Life policies, etc.
168 Unquoted shares and securities.
169 Farm cottages.
170 Leases for life, etc.
CHAPTER II ESTATE ON DEATH
171 Changes occurring on death.
172 Funeral expenses.
173 Expenses incurred abroad.
174 Income tax and unpaid inheritance tax.
175 Liability to make future payments, etc.
176 Related property etc.—sales.
177 Scottish agricultural leases.
CHAPTER III SALE OF SHARES ETC. FROM DECEASED’S ESTATE
178 Preliminary.
179 The relief.
180 Effect of purchases.
181 Capital receipts.
182 Payment of calls.
183 Changes in holdings.
184 Exchanges.
185 Acquisition of like investments.
186 Value of part of a fund.
186A Cancelled investments.
186BSuspended investments.
187 Attribution of values to specific investments.
188 Limitation of loss on sale.
189 Date of sale or purchase.
CHAPTER IV SALE OF LAND FROM DECEASED’S ESTATE
190 Preliminary.
191 The relief.
192 Effect of purchases.
193 Changes between death and sale.
194 Leases.
195 Valuation by reference to other interests.
196 Sales to beneficiaries etc. and exchanges.
197 Compulsory acquisition more than three years after death.
197A Sales in fourth year after death.
198 Date of sale or purchase.
PART VII LIABILITY
General rules
199 Dispositions by transferor.
200 Transfer on death.
201 Settled property.
202 Close companies.
203 Liability of spouse or civil partner.
204 Limitation of liability.
205 More than one person liable.
Special cases
206. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
207 Conditional exemption, etc.
208 Woodlands.
209 Succession in Scotland.
210 Pension rights, etc.
Burden of tax, etc.
211 Burden of tax on death.
212 Powers to raise tax.
213 Refund by instalments.
214 Certificates of tax paid.
PART VIII ADMINISTRATION AND COLLECTION
Management
215 General.
Accounts and information
216 Delivery of accounts.
217 Defective accounts.
218 Non-resident trustees.
218A Instruments varying dispositions taking effect on death
219 Power to require information.
219A Power to call for documents etc.
219B Appeal against requirement to produce documents etc.
220 Inspection of property.
220A Exchange of information with other countries.
Determinations , reviews and appeals
221 Notices of determination.
222 Appeals against determinations.
223 Late notice of appeal.
223AAppeal: HMRC review or determination by tribunal
223BAppellant requires review by HMRC
223CHMRC offer review
223DNotifying appeal to the tribunal
223ENature of review etc
223FEffect of conclusions of review
223GNotifying appeal to tribunal after review concluded
223HNotifying appeal to tribunal after review offered but not accepted
223IInterpretation of sections 223A to 223I
224 Determination of appeal by tribunal.
225 Appeals from Special Commissioners.
225AExtension of regulation-making powers.
Payment
226 Payment: general rules.
227 Payment by instalments—land, shares and businesses.
228 Shares, etc. within section 227.
229 Payment by instalments—woodlands.
230 Acceptance of property in satisfaction of tax.
231 Powers to transfer property in satisfaction of tax.
232 Administration actions.
Interest
233 Interest on unpaid tax.
234 Interest on instalments.
235 Interest on overpaid tax.
236 Special cases.
Inland Revenue charge for unpaid tax
237 Imposition of charge.
238 Effect of purchases.
Certificates of discharge
239 Certificates of discharge.
Adjustments
240 Underpayments.
240AUnderpayments: supplementary
241 Overpayments.
Recovery of tax
242 Recovery of tax.
243 Scotland: recovery of tax in sheriff court.
244 Rights to address court.
Penalties
245 Failure to deliver accounts.
245A Failure to provide information etc.
246 Failure to appear before Special Commissioners, etc.
247 Provision of incorrect information.
248 Failure to remedy errors.
249 Recovery of penalties.
250 Time limit for recovery.
251 Appeals against summary determination of penalties.
252 Effect of award by the tribunal.
253 Mitigation of penalties.
Miscellaneous
254 Evidence.
255 Determination of questions on previous view of law.
256 Regulations about accounts, etc.
257 Form etc. of accounts.
258 Service of documents.
259 Inspection of records.
260 Inland Revenue Regulation Act 1890.
261 Scotland inventories.
PART IX MISCELLANEOUS AND SUPPLEMENTARY
Miscellaneous
262 Tax chargeable in certain cases of future payments, etc.
263 Annuity purchased in conjunction with life policy.
264 Transfers reported late.
265 Chargeable transfers affecting more than one property.
266 More than one chargeable transfer on one day.
267 Persons treated as domiciled in United Kingdom.
267A Limited liability partnerships.
Interpretation
268 Associated operations.
269 Control of company.
270 Connected persons.
271 Property of corporations sole.
271AQualifying non-UK pension scheme
272 General interpretation.
Supplementary
273 Transition from estate duty.
274 Commencement.
275 Continuity, and construction of references to old and new law.
276 Consequential amendments.
277 Repeals.
278 Short title.
SCHEDULE 1
SCHEDULE 2 PROVISIONS APPLYING ON REDUCTION OF TAX
Interpretation
1In this Schedule— (a) references to a reduction are to...
Death within seven years of potentially exempt transfer
1AWhere a person who has made a potentially exempt transfer...
Death within seven years of chargeable transfer
2Where a person who has made a chargeable transfer other...
Settlement without interest in possession
3Where tax is chargeable under section 65 of this Act...
Disposal of trees etc. following exemption on death
4Where the value of any trees or underwood has been...
Conditionally exempt transfers
5Where tax is chargeable under section 32 or 32A of...
Maintenance funds for historic buildings
6Where tax is chargeable under paragraph 8 of Schedule 4...
7. . . . . . . . . ....
Relevant dependant with pension fund inherited from member over 75
6AWhere tax is chargeable under section 151B of this Act...
SCHEDULE 3 GIFTS FOR NATIONAL PURPOSES, ETC.
The National Gallery.
The British Museum.
The National Museums of Scotland..
The National Museum of Wales.
The Ulster Museum.
Any other similar national institution which exists wholly or mainly...
Any museum or art gallery in the United Kingdom which...
Any library the main function of which is to serve...
The Historic Buildings and Monuments Commission for England.
The National Trust for Places of Historic Interest or Natural...
The National Trust for Scotland for Places of Historic Interest...
The National Art Collections Fund.
The Trustees of the National Heritage Memorial Fund.
. . . . . . . . . ....
The Friends of the National Libraries.
The Historic Churches Preservation Trust.
Commission for Rural Communities.
Natural England.
Scottish Natural Heritage.
Countryside Council for Wales.
The Marine Management Organisation.
Any local authority.
Any Government department (including the National Debt Commissioners).
Any university or university college in the United Kingdom.
A health service body, within the meaning of section 986...
SCHEDULE 4 MAINTENANCE FUNDS FOR HISTORIC BUILDINGS, ETC.
PART I TREASURY DIRECTIONS
Giving of directions
1(1) If the conditions mentioned in paragraph 2(1) below are...
Conditions
2(1) The conditions referred to in paragraph 1 above are—...
3(1) The requirements referred to in paragraph 2(1)(a)(i) above are...
4(1) Paragraphs (a) and (b) of paragraph 3(1) above do...
Withdrawal
5If in the Treasury’s opinion the facts concerning any property...
Information
6Where a direction under paragraph 1 above has effect in...
Enforcement of trusts
7Where a direction under paragraph 1 above has effect in...
PART II PROPERTY LEAVING MAINTENANCE FUNDS
Charge to tax
8(1) This paragraph applies to settled property which is held...
Exceptions from charge
9(1) Tax shall not be charged under paragraph 8 above...
10(1) Tax shall not be charged under paragraph 8 above...
Rates of charge
11(1) This paragraph applies where tax is chargeable under paragraph...
12(1) This paragraph applies where tax is chargeable under paragraph...
13(1) The first rate is the aggregate of the following...
14(1) If the settlor is alive, the second rate is...
15Where property is, by virtue of paragraph 1(3) above, treated...
Maintenance fund following interest in possession
15A(1) In relation to settled property to which this paragraph...
PART III PROPERTY BECOMING COMPRISED IN MAINTENANCE FUNDS
16(1) Tax shall not be charged under section 65 of...
17(1) Tax shall not be charged under section 65 of...
18In paragraphs 16(2) and 17(4) above the references to the...
SCHEDULE 5 CONDITIONAL EXEMPTION: DEATHS BEFORE 7TH APRIL 1976
Charge on failure of condition of exemption—objects
1(1) Where, under section 31 of the Finance Act 1975,...
2(1) The following provisions of this paragraph shall have effect...
Charge on failure of condition of exemption—buildings etc.
3(1) Where, under subsection (2) of section 34 of the...
4The tax chargeable under paragraph 3 above with respect to...
Further undertaking on disposal
5(1) The further undertaking referred to in paragraph 1 above...
Requirements of sale
6A sale complies with this paragraph if—
SCHEDULE 6 TRANSITION FROM ESTATE DUTY
General
1References in any enactment, in any instrument made under any...
Surviving spouse or former spouse
2In determining for the purposes of this Act the value...
Sales and mortgages of reversionary interests
3(1) Where a reversionary interest in settled property was before...
Objects of national etc. interest left out of account on death
4(1) In its application to a sale which does not...
SCHEDULE 7 COMMENCEMENT: SUPPLEMENTARY RULES
1In this Schedule “the repealed enactments” means the enactments repealed...
2Sections 126 to 130 of this Act shall have effect...
3Where section 146 of this Act has effect in relation...
4Section 147 of this Act, so far as it relates...
5. . . . . . . . . ....
6Section 150 of this Act shall have effect (to the...
7Section 203 of this Act shall have effect (to the...
8Section 218 of this Act, and section 245 so far...
9Section 219 of this Act, and section 245 so far...
10Section 220 of this Act shall come into force on...
11Any order made under section 233 of this Act shall...
12Where payments are made or assets transferred after the end...
13Section 264 of this Act shall have effect (to the...
14This Act shall not have effect in a case which...
SCHEDULE 8 CONSEQUENTIAL AMENDMENTS
The Land Registration Act 1925
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Crown Proceedings Act 1947
2In section 14(1)(b) of the Crown Proceedings Act 1947, for...
The Land Charges Act 1972
3(1) In section 2 of the Land Charges Act 1972—...
The Finance Act 1975
4In section 49(4) of the Finance Act 1975 after the...
5—7. . . . . . . . . ....
The Finance Act 1977
8In section 38 of the Finance Act 1977—
The Capital Gains Tax Act 1979
9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The National Heritage Act 1980
13In section 8(1) of the National Heritage Act 1980 after...
14In section 12(3) of the National Heritage Act 1980 for...
15In section 13(3) of the National Heritage Act 1980 after...
16In section 14(1) of the National Heritage Act 1980, for...
The Finance Act 1980
17(1) Section 52 of the Finance Act 1980 shall be...
18(1) Section 53 of the Finance Act 1980 shall be...
19In section 98 of the Finance Act 1980 for the...
The Supreme Court Act 1981
20In section 109 of the Supreme Court Act 1981—
The Finance Act 1982
21In section 61(1) of the Finance Act 1982—
22In section 62 of the Finance Act 1982 for the...
The Finance (No. 2) Act 1983
23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Value Added Tax Act 1983
24In Group 11 of Schedule 6 to the Value Added...
The Land Registration Act (Northern Ireland) 1970
25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 9 REPEALS

Inheritance Tax Act 1984

1984 c. 51

An Act to consolidate provisions of Part III of the Finance Act 1975 and other enactments relating toF1 inheritance tax.

Annotations:
Commencement Information
I1

Act wholly in force at 1.1.1985 see s. 274(1).

Editorial Information
X1

A Table showing the derivation of the provisions of this consolidation Act will be found at the end of the Act. The Table has no official status.

X2

By Finance Act 1986 s. 100(1), on and after 25 July 1986 the Capital Transfer Tax Act 1984 may be cited as the Inheritance Tax Act 1984.

X3

This Act is based on material edited by the Inland Revenue and the style of editing for effects prior to 1.2.1991 differs from most Acts on the Statute Law Database.

Amendments (Textual)
F1

By Finance Act 1986 s. 100(1), on and after 25 July 1986 the Capital Transfer Tax Act 1984 may be cited as the Inheritance Tax Act 1984.

Modifications etc. (not altering text)
C1

Act modified (1.11.2004 with effect as mentioned in reg. 1 of the amending S.I.) by The Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004 (S.I. 2004/2543), reg. 7(2)

C2

Act modified (with effect in accordance with s. 195(12) of the amending Act) by Finance Act 2003 (c. 14), s. 195

C3

Act amended (1.5.1995 with effect in relation to transfers of value or other events occuring on or after 6.4.1995) by 1995 c. 4, s. 154(2)(3)(5)

Act modified (31.7.1998 with effect as mentioned in s. 161 of the amending Act) by 1998 c. 36, s. 161(2)(c)