IHTM22042 - Quick succession relief: when the relief applies

For tax on the deceased's death estate to be reduced by QSR ( IHTM22041) there must be

• an earlier chargeable transfer ( IHTM04027) (including a PET ( IHTM04057) which fails)
• within five years of the death
• on which tax was (or becomes) payable, and
• the chargeable transfer must have increased the deceased's estate.

Example

A died in March 1998 leaving an estate of £250,000. By Will whole estate passed to a child, C. Tax of £14,000 was paid. C dies in 2000. QSR is due on C's death if their estate is taxable also.

The earlier chargeable transfer can be

• on death
• a lifetime chargeable when made ( IHTM04067)
• a failed PET (IHTM04047), or
• of settled property ( IHTM16000) whether held on interest in possession ( IHTM16061) or discretionary trusts.

The property the deceased received under the earlier transfer need not be included in the deceased's death estate for the QSR to be due. But if a comparison of the deceased's free estate ( IHTM04029) and the earlier transfer suggests there may be undisclosed lifetime gifts you must consider whether an enquiry is appropriate.