IHTM04024 - Structure of the charge: what is a transfer of value?

A transfer of value is a disposition ( IHTM04023) made by a person as a result of which the value of his estate has decreased. All lifetime transfers must start with a disposition. Charges arising on death and on settled property where an interest in possession exists are deemed transfers of value.

A transfer of value may only qualify as a potentially exempt transfer ( IHTM04057) to the extent that it would, apart from IHTA84/S3A, be a chargeable transfer. This means that a transfer of value may be partly an exempt transfer (IHTM04026) and partly a potentially exempt transfer.

For example, A gives B £10,000. The annual exemption ( IHTM14141) of £3,000 is available. So the gift is

• an exempt transfer as to £3,000, and as it would, apart from IHTA84/S3A, be a chargeable transfer, it is
• a potentially exempt transfer as to £7,000.