Inheritance Tax Act 1984

[F1 8G Meaning of “brought-forward allowance” U.K.

(1) This section is about the amount of the brought-forward allowance (see section 8D(5)(f)) for a person (“P”) who dies on or after 6 April 2017.

(2) In this section “related person” means a person other than P where—

(a) the other person dies before P, and

(b) immediately before the other person dies, P is the other person's spouse or civil partner.

(3) P's brought-forward allowance is calculated as follows—

(a) identify each amount available for carry-forward from the death of a related person (see sections 8E [F2 , 8F and 8FD], and subsections (4) and (5)),

(b) express each such amount as a percentage of the residential enhancement at the death of the related person concerned,

(c) calculate the percentage that is the total of those percentages, and

(d) the amount that is that total percentage of the residential enhancement at P's death is P's brought-forward allowance or, if that total percentage is greater than 100%, P's brought-forward allowance is the amount of the residential enhancement at P's death,

but P's brought-forward allowance is nil if no claim for it is made under section 8L.

(4) Where the death of a related person occurs before 6 April 2017—

(a) an amount equal to £100,000 is treated for the purposes of subsection (3) as being the amount available for carry-forward from the related person's death, but this is subject to subsection (5), and

(b) the residential enhancement at the related person's death is treated for those purposes as being £100,000.

(5) If the value (“RPE”) of the related person's estate immediately before the related person's death is greater than £2,000,000, the amount treated under subsection (4)(a) as available for carry-forward is reduced (but not below nil) by—

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Textual Amendments

F1 Ss. 8D-8M inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), s. 9(4)

F2 Words in s. 8G(3)(a) substituted (15.9.2016) by Finance Act 2016 (c. 24), Sch. 15 para. 6