IHTM14236 - Normal expenditure out of income: loans made prior to 6 April 1981

Where the transfer of value arises from a loan of money (or other property) prior to 6 April 1981, the taxpayer does not need to show that it formed part of usual expenditure or was made out of income.

Instead, the transfer is exempt under IHTA84/S29 (4) if

• the transfer was a normal one on the part of the transferor (the lender), and
• the transferor was left with sufficient income to maintain their usual standard of living.

This is a rarely seen provision nowadays as it applies only to pre-April 1981 transfers. If you come across any such case, you can refer to Technical Group for advice.