IHTM22081 - Quantifying increase at deceased's estate: special provisions for reversions

In calculating the increase in your deceased's estate on the earlier chargeable transfer ( IHTM04027), ignore any reversionary interest ( IHTM16231) which is excluded property ( IHTM04251) to which your deceased became entitled on the earlier chargeable transfer or before the chargeable transfer.

Example

A by Will leaves property to B for life with remainder to C absolutely. The reversion which C acquires under A's Will in fact increases C's estate. But because of IHTA84/S141 (6) the reversion does not increase C's estate for the purposes of QSR ( IHTM22041).

Accordingly

• there can be no QSR on C's death for the tax charged on A's death
• if C dies after B, you calculate the QSR for tax payable on B's death on the basis that the increase in C's estate on B's death was the value of the settled fund at B's death, less the tax payable on it.

(The increase is not limited to the difference between the value and the value of C's pre-existing reversion.)

IHTA84/S141 (6) is necessary to achieve this result because the excluded property provisions in IHTA84/S3 (2), IHTA84/S5 (1) and IHTA84/S48 (1) do not apply for the purposes of IHTA84/S141.