IHTM04051 - Lifetime transfers: the charging provisions

The basic provision governing the tax charge on lifetime transfers is IHTA84/S3 (1). The charge may be divided into three parts. The subsection provides that a transfer of value is

• a disposition, ( IHTM04023)
• made by a person, ( IHTM04052)
• as a result of which the value of his estate immediately after the disposition is less than it would be by the disposition, ( IHTM04054)

The value of the transferor’s estate before the transfer excludes any excluded property, ( IHTM04251) IHTA84/S3 (2).

Most lifetime transfers are potentially exempt transfers (PETs), ( IHTM04057) that is they are only chargeable if the transferor dies within seven years of making the transfer, IHTA84/S3A (1) and (4). But a lifetime transfer may be chargeable as

• an immediately chargeable transfer, ( IHTM04067) or
• a gift with reservation of benefit ( IHTM04071)(GWR).