IHTM26071 - Other calculations: order in which to apply the partly exempt transfer rules

To minimise the risk of error in a case involving more than one of the partly exempt transfer rules you need to apply them in the correct order. This order is as follows

• Step 1 ( IHTM26081) - Set out the starting values of the specific gifts ( IHTM26011)
• Step 2 ( IHTM26090) - If the total value of the specific gifts exceeds the value of the free estate ( IHTM26003), consider abatement ( IHTM26003) under IHTA84/S37 (1)
• Step 3 ( IHTM26101) - If any business relief ( IHTM25131) or agricultural relief ( IHTM24001) has been allowed, apply the interaction ( IHTM26103) rules in IHTA84/S39A to reduce the value of the specific gifts
• Step 4 ( IHTM26121) - Gross up ( IHTM26121) the value of any chargeable specific gifts which do not bear their own tax. The value to gross up is the value after any reduction under Step 3
• Step 5 ( IHTM26180) - Compare the total value of the specific gifts (exempt and chargeable), with the value of the free estate after business relief and agricultural relief