IHTM22043 - Quick succession relief: when the relief does not apply

There can be no QSR ( IHTM22041) where

• the earlier transfer to the deceased was

• no tax is payable on the deceased's death estate because it is

Example

T died in June 1997 leaving an estate of £450,000. By Will, the whole estate passes equally to the spouse, S, and a child, C. Half the estate was spouse exempt. Tax of £4,000 was paid on the chargeable transfer of the other half.

S dies in 2000. There can be no QSR on S's death by reference to the tax paid on T's death because the transfer to S was an exempt transfer.

Even where there are two chargeable transfers within 5 years, there is no QSR if, between the two transfers, there is an intervening exempt transfer

Example

A died in March 1996 leaving an estate of £200,000. By will, whole estate passes to brother B. Tax was paid on the chargeable transfer.

B died in October 1998. By will, whole estate to spouse S. The transfer on B's death is wholly exempt so there can be no QSR.

S dies in August 2000. S's estate was increased by the exempt transfer on the death of B, not by the chargeable transfer on the death of A. So there can be no QSR on S's death by reference to the tax paid on A's death, even though the interval between the deaths of A and S is less than 5 years and the whole of A's estate may be reflected in that of S.

In such a case you must deny QSR.

(This text has been withheld because of exemptions in the Freedom of Information Act 2000).