IHTM24112 - Replacement property: Limitation of the relief

IHTA84/S118 (3) restricts the relief available under subsections (1) and (2). Subsection (3) provides that the relief should not exceed what it would have been had the replacement(s) not been made. Its purpose is to prevent a person who has qualified for relief from increasing the amount of relief available by purchasing a much more expensive property shortly before death or making a transfer. It is an anti-avoidance provision.

IHTA84/S118 (4) provides that changes resulting from the formation, alteration or disposition of a partnership are to be disregarded for the purposes of IHTA/S118 (3).

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