Where the order of transfers made on the same day affects the
value transferred (as where one or some of them have to be grossed
up and another or others do not), treat them as made in the order
which results in the lowest value chargeable.
Thus you treat the ones to be grossed up as made first, so as
to secure grossing up (
IHTM14593) at a lower rate.
Where grossing does not apply, calculate the value of the transfers as if they comprised a single transfer of the same total value. This applies whether you know the actual order of the transfers or not.
A transferor who has made no previous chargeable transfers makes
five such transfers each of £40,000 on the same date.
The tax on each is 1/5 of the tax on a single transfer of
£200,000.
Both S266(1) and (2) are capable of operating together on
gifts made on a single day.
A man on one day makes
The two transfers will, under IHTA84/S266 (1) be treated as made
before the three, but IHTA84/S266 (2) will then operate separately
on the two transfers, and on the three, so as to provide for each
set a single effective rate found by treating the components of
that set as a single transfer of their aggregate amount.
These rules do not apply to the transfer on death, so that
where lifetime gifts are made on the day of a person’s death
you will always treat the lifetime gifts as made first.
IHTA84/S2 (3) equates chargeable transfers with chargeable occasions for settlements without interests in possession ( IHTA84/Part IIIChapter III ). Accordingly, IHTA84/S266 (1) and (2) automatically apply to such occasions and to capital distributions made (or treated as made) on the same day from the same settlement ( IHTA84S/266 (4)).
